Today was day 4 of a rally attempt, and it seemed like somebody was trying to suck the IBD crowd into the market, because today we had what would have been a clear follow through day, except for one big component...volume. It just wasn;t there. There were other problems I noted during the day, such as poor performance from the market leaders, and no industry leadership, so today's lack of volume did not come as a big shock. My earlier gut feeling that this rally wasn;t gong to go far is so far proving true,a s if this decline in volume continues, we aren't going anywhere.
The Nasdaq also gave an early clue with it's drag on the market. Price relative needs to move up here if we are going to have a sustained rally, and it;s just not doing it.
the opposite needs to happen on the Dow industrials. While price relative has stopped going up, it is not dropping. It still appears the big money is heading here, in an effort to cushion the blow from the next down draft.
The Russell 2000 had a pretty good day today, but the price relative line up trend is pretty weak. This does have a pretty pen field before it hits major resistance, but the volume on the IWM is petering out, as well. We are headed into the last two weeks of August, probably the heaviest vacation time on Wall Street, so we ccan probably expect low volume moves until after labor day. The compuers, of course, do not take vacations, and we will be at the mercy of them for the next couple of weeks. We might go a little higher from here, but at some point this is going to run out of steam and we will probably head for a retes of the lows.
I will have the new highs update shortly.
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