Trading in the Stock Indices was extremely important on Wednesday and Thursday. While the probability of testing the lows is declining, the Market gave us some interesting information in which to analyze in the coming week. I am reminded that trading is being long. Trading is being short, and trading is standing aside. That is my position until the Market gives me a little more information. I believe that will be resolved the first part of the coming week.
The range of the Indices at the end of the week was very important. Volume exploded on Thursday in the NYSE but price did not explode with it. This meant there were as many buyers as sellers. Demand was being met with supply. Therefore, buyers were not able to drive the market substantially higher. This happened on the last two trading days. Therefore, in the short-term, the range of the last two days is extremely important. A break of those extremes will give the next short to intermediate term move. At times, volume like this can signal larger money selling into a high.
DAILY BRIEFING 0200408 from Joe Mertes on Vimeo.