My pal Kevin Lane focuses on the volume during last Friday’s sell off (and I agree):

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Spdr_vol_12706

Nasdaq_12706

Thanks, Kev.

Category: Technical Analysis

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7 Responses to “Sell Off on Volume”

  1. Joe says:

    Volume is tricky, though. Check out April 15th’s selloff, same type of action, but led to big rally instead of end of bull market. In fact, all three days that exhibited the same type of sell volume in the Spiders since the beginning of the bull market in October 2002 were at market bottoms. Just a caveat. It is obviously still something to keep an eye on.

    PLEASE DON’T PUT ME IN THE “VOLUME DOESN’T MATTER” CAMP, THOUGH!

  2. Michael says:

    I believe the action after a high volume sell-off is just as important.

    The more the price is retraced I’ve observed, the less “meaningful” is the high volume move.

    So far we have a pretty good retracement going on. To me that indicates that while the sell-off should be respected, it should also be taken with a grain of salt.

  3. zanzibar says:

    Good point Michael. Last Fri’s drop did not rattle the markets as we have had a nice consolidating rebound this week.

    Although its prudent to be cautious, there’s plenty of liquidity still around and I would not be surprised to see a melt up to shake out the shorts and get bullish sentiment way over the top. If the Fed stops hiking next week we could have that scenario.

  4. mh497 says:

    Battapaglia went negative this year, that’s all we need to know.

  5. John Navin says:

    On the other hand, last time that much volume appeared, in October, the market bottomed.

  6. blue][erring says:

    this was a large LEAPS options expiration with a large movement down, following a massive move (in general) from October to Jan, so couldn’t a lot of volume result from this and not just any old day’s big volume?
    -][

  7. todd says:

    There is NO FEAR in this market at all… How is it that everybody just brushed off the GDP numbers today?! Crazy stuff.

    Plus- I think it is outrageous that everybody believes the Fed will iron out any bumps in the road with rate cuts. The market should be a little more cut-throat than that…

    And here’s some news for everybody: 1) OPEC/Iran will not cut production at $70/barrel, 2) everyone will probably keep making threats to keep oil around $70/barrel and 3) the Fed won’t cut rates until there is blood on the street.