Stocks rise on hope we have seen the worse, but volume slows as the week progressed.
It was certainly a good weekfor the stock market when you are looking from afar. Get up close and it is not as pretty as it may appear. Volume on the week began to weaken after Tuesday’s follow through in the Dow Jones Industrial Average and S&P 500. Even with the weakening volume we are starting to see stocks beginning to step up and begin to form early chart patterns that I like. There are still missing pieces to the puzzle that are missing and need to be found before I can get into the market.
The New High to New Low ratio has been favoring New Lows for quite some time. This is rather bearish, ideally we would like to see New Highs outpace New Lows by a wide margin signalling strength. It may be awhile before we start seeing a positive New High to New Low ratio, but we need it to be positive to prove we can sustain a rally.
Another interesting tidbit was the amount of Calls being purchased, it declined since the follow through day. It is interesting because, under a new bull market Calls will be bought hand over fist. This was simply not the case, the number of calls being bought dropped dramatically. Not an encouraging sign for a newly confirmed rally.
The Monster Stock portfolio will remain in cash until we get some positive signs.
MST
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