If you pull up a chart of volume associated with this rally over the past 4 weeks, you will see that, on average, volume is declining as prices are rising.
The same is true of the listed issues. Although this situation can continue to occur for some time to come and although initially it isn't a concern, when a rally doesn't broaden, doesn't expand in terms of price and in terms of new highs, then that rally is living on borrowed time.
Some time back I talked about the need to watch the volume story unfold as the market rises. That story is not compatible with the thought that this market is the beginning of a longer term bull move. Considering that we are 5 weeks into this now without much of a rest, I would consider the rally as maturing at this point. My expectation is that we will, at some point soon, get a shake out and then, if volume doesn't pick up, we will likely see some sort of slow topping process start to take form.
That suggests that you work both sides of the table here and look to buy the first shakeout again but then watch closely to see if the underlying internals begin to change in terms of volume and new highs. If not, we are likely putting that topping process in place.
The same is true of the listed issues. Although this situation can continue to occur for some time to come and although initially it isn't a concern, when a rally doesn't broaden, doesn't expand in terms of price and in terms of new highs, then that rally is living on borrowed time.
Some time back I talked about the need to watch the volume story unfold as the market rises. That story is not compatible with the thought that this market is the beginning of a longer term bull move. Considering that we are 5 weeks into this now without much of a rest, I would consider the rally as maturing at this point. My expectation is that we will, at some point soon, get a shake out and then, if volume doesn't pick up, we will likely see some sort of slow topping process start to take form.
That suggests that you work both sides of the table here and look to buy the first shakeout again but then watch closely to see if the underlying internals begin to change in terms of volume and new highs. If not, we are likely putting that topping process in place.
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