A Reason To Be Cautious…
The S&P 500 has been in rally
mode since 8/6 with only one major flaw: Volume has been receding
the entire time.
 
We can also see
this on the Nasdaq since it put in a short-term bottom on 8/7.
 
Since the major indices began posting
blatant distribution, or evidence of professional selling, several weeks ago,
they have yet to give us any real signs of strength. This isn’t that bad, but
it is a reason to be cautious and go as far as avoiding new purchases until
things strengthen.
Individual stocks have also been lacking
real volume. Boston Scientific
(
BSX |
Quote |
Chart |
News |
PowerRating) pushed through resistance at 64.81,
but volume was below average.
 
The market has held strong among the signs of selling and
we are still in a historical slow season for trading activity. As this summer
wraps up, it will be more and more important to take notice of the market’s
daily action as well as that of leading stocks.