Today’s somewhat moderate red day took a hit in terms of volume with distribution going on under the surface, especially on the Nasdaq. The Market in general is most healthy when TVO is between 0 and +3.0. From where we are now it will take quite a bit of accumulation to get back into that range before the end of the first week of the new year. It bears repeating here (pun intended) that the bulls case of “forever rally” would be much more reassuring with more accumulation behind it. Things can drift higher for only so long.
This year one aquaintance I shouldn’t forget is my broker friend, and long time TVO fan, “RB” (his firm has made Forbes top 10 list). Right now he says things are setting up for a mild pullback in Jan which is right in line with the TVO MB. I’m thankful for our friendship and our discussions have helped me realize that volume is one area where fundamentals and technicals often see eye to eye. Happy New Year! -MD