Monday, April 4, 2016

QQQ Low Volume Warns of A Coming Correction in Stocks

QQQ Volume is Relatively Low Indicating Probability of  Correction Soon
The chart above is a daily QQQ volume chart with a moving average and standard deviation band.  In this case we see the moving average is about as low as it has been in the last 2 years.  The previous times it hit this low level were right near intermediate term peaks in stocks.  Also note that the moving average is low relative to the standard deviation bands.

This would imply that the power of this rally is fading.  I believe that CoT data suggests a non sustainable rally here as well.  I am not saying that stocks could not move to new highs, but given some of the factors I have noted recently, it appears that at least a sizable short term move to the downside will occur before prices could reach to new highs.


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