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Low Volume Continues As The Market Closes Just Off The Lows Of The Day

 June 30, 2010 01:50 AM

After Friday's Russell re-balance the market took a breathier as stocks ended the day just their lows.  Early in the day a disappointing Dallas Federal Reserve Manufacturing activity index dropped four percent, but reaction was mute as the market ignored the indicator.  Stocks pushed to the highs of the day, but were unable to sustain the highs.  Institutions weren't supporting bids, volume proved institutions weren't involved in the market.  It appeared the market would eek out gains until the final 15 minutes when sellers pushed stocks into the red.  Not a bad day, not a good day as stocks took a rest.

A positive sign today was early on in the session the market was pushing near Friday's low, but found support.  There is a possibility Friday's low may be a higher low put in by the market.  Time will tell and we'll need to see the market grab some much needed accumulation to confirm a new higher low.  More importantly, we'll need to see leading stocks continue to see positive action supporting any move higher.  Any sign of distribution will be a huge warning sign this market simply can not sustain any upside.  Cash remains king in this environment until we get confirmation in either direction.

[Related -Automating Ourselves To Unemployment]

Boring days are necessarily bad in the market especially when we have such turmoil across the globe.  The world is dealing with austerity measures, debt issues, currency problems and the list goes on.  But, the market has already digested these issues and a possibility the US government cutting its own deficit.  With much uncertainty it'll be important to see what side volume lands on and it will confirm a new trend.  Let's not forget we do have a confirmed uptrend, but without any major accumulation since the follow-through day anything is possible.  In addition, last week's distribution does put this uptrend on notice.  Just another sign cash remains king.

[Related -Fed: Waiting For June… Or Godot?]

Many traders feel the need to be in the market daily to make money.  If one would study the greatest traders of all time discovered grabbing a trend and concentrate in a trend was the path to great wealth.  It was rumored Jesse Livermore was short more than a million shares before the 1929 stock market crash.  Livermore spotted a change in the trend and plowed into the market.  His reward was more than one million dollars per one dollar lost in the crash.  Now many believed profiting on the short side is unamerican, but the point is simple when a new trend develops take advantage of it.

Perhaps we'll get more excitement as we approach Friday's job number.  Anything is possible, but cash remains the best place.



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