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NASDAQ Strikes a Follow-Through Day as NYSE Volume Lags

|Includes: AABA, AAPL, BIDU, BKNG, C, CMG, CRYFQ, DDC, DGP, DIA, EBAY, EGO, EWY, SPDR Gold Trust ETF (GLD), GMCR, GOOG, GS, IAG, IBM, ISRG, MMM, MSFT, NEM, NTR, PCP, PG, QQQ, SHLD, SLV, SPY, TBT, UGL, VXX

The recently volatility has the market looking loose, but traders pushed stocks to the highs of the day at the close.  Volume ran lower for much of the trading session until the final minutes when volume jumped to push the NASDAQ over the edge.  However, on the NYSE volume came in lower on the day showing institutions weren’t excited to accumulate shares.  Nonetheless, the NASDAQ notched a follow-through day and it must be respected.

 

While we will respect the follow-through day it should be noted that follow-through days in June are more prone to failure.  History demonstrates this and there isn’t a reason as to why they fail.  June follow-through days are just more prone to failure and before we go nuts trying to buy longs know your history.

There is a strong possibility this market can rally quite a ways before failing.  We could rally for a few weeks only to roll back over.  We’ll be taking clues from the stocks that breakout and lead this market.  If we begin to see breakout failures in leading stocks it’ll be a clue the market simply isn’t ready to continue its move.  Another sign will be the market flashing distribution.

While there are some warning flags we won’t completely ignore or even fight this trend.  It’ll be important we either get another follow-through type day or at least solid price advances with higher volume.  If this market continues higher on lighter volume it’ll be another sign this confirmed rally will likely fail.  Big Wave Trading will certainly be on top of the market action and we’ll be ready for whatever the market gives us.

Stay nimble and always have a cut loss plan.  It is essential you protect your downside.

Make sure to check out this note about follow-through days.




Disclosure: No Positions