After another ominous weekend (a possible government shutdown and an angry NoKo) the market managed to fearlessly climb higher on Monday, keeping SPY in a tight consolidating range just below the magic 240 number (Who really cares about Nasdaq 6000 anyway?). But a lot of folks are saying, “There’s no volume, so the bulls are just running on fumes at this point.” Well, that may be the case if we just take total volume at face value… which basically means: going up on high volume is good while going up on low volume is, well, you get the idea.
As the AMD longs can attest to today, the stock market doesn’t have to have a reason, at least on the surface, to do what it does. If we take a look under the hood, we’ll see that even though overall volume dropped -13%, advancing volume had a significant bump (-1 on the Heat Gauge) especially on the Nasdaq (our fearless leader, which in all of April only logged 2 distribution days). Our General Investment Strategy (GI) has now shifted to “buy” mode, and although plenty of profit taking lies ahead, so far it’s looking like the “May Exodus” may end up being put on hold for a while. -MD
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