Volume on Tuesday took a 180 degree turn and rose +17%, filling in most of the overall volume loss of the past few sessions. Some distribution showed up on SPY and the market went down, but it didn’t go DOWN down… and the ex-chartist in me would probably see it as a “perfect inside day with a reverse head and shoulders on the 5 minute,” but we won’t go there. What we can say from a volume perspective, though, is that now we have some action brewing under the hood, or “churning” as it’s called, and big moves (in either direction) can and often do follow. Markets were quite oversold last Thursday, but has the bounce already played itself out, or is it just getting started? Long-term we’re still not in a “safe” area according to our GI (and TVO has just turned ANXIOUS), but for the bulls in the short-term, staying long may be a calculated risk worth taking. -MD
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