Tuesday, August 26, 2014

Lowest Volume in SPY in Over 2 Years - More Topping Signs

Click on Chart to Enlarge

While it could be argued that we are in the summer doldrums and that is why volume is low, I don't know that it can rationalize the fact that SPY traded its lowest volume INCLUDING holiday trade, in over 2 years, except for Christmas Eve 2013.  Very interesting.  Seems like the market is just whispering...a couple very narrow range doji candlesticks right at new all time highs, and with the Dow 30 joining in today with another new all time high. 

This does not seem to me a good sign for bullish market action going forward.  Be warned here - in my opinion - that this market continues to display sign after sign of topping with divergences in every category of market analysis that I track - price, volume, put/call volume, volatility, breath.

This weekend's CoT report will be of interest in that both the S&P 500 and Dow 30 made new highs by today, and Friday's report will reflect data through today/Tuesday.  That report has not flagged any major smart money selling here recently, so it will be interesting to see how they respond to the new highs.  Of note though, as the lats bull market topped, the typical contrary nature of the CoT positions was not consistent, and so it would only be a possible confirming indicator to me of what is already obvious from my standpoint.....that stocks are likely very near to a significant high here.

PS - the chart above was posted shortly after close, and after volume numbers were finalized the reading changed.  The chart above showed that volume was the lowest in over 2 years, but the final number is a bit higher than Christmas eve 2013.

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