They say where there’s smoke, there’s fire (or in the current administration, someone gets fired), but the stock market seems to view current events as nothing more than smoke and mirrors and continues onward and upward. You could also say that where there’s volume, prices will follow, and that seems to be the case with Monday’s ATH as overall volume rose +6%, logging an accumulation day across the indices. But does price influence volume as well? Halfway through the session (according to our new Heat Gauge Live, still in beta) there appeared to be a projected drop in volume, but an end of day surge (resulting from FOMO, perhaps?) quickly changed the tide.
If SPY 240 can indeed entice more institutional players on board, it’s got its job cut out for it according to TVO, which has already been telling us that volume has been heading south for some time (and now at zero has just shifted to “sell” mode). And market internals are also on the same page, as IO (also at zero) is right on the edge of overbought territory. As long as we keep accumulating, markets will go higher long-term and fear of missing out, or FOMO, can certainly ignite the flame… But it’s looking at the moment, that the burning desire to chase (by Money Managers, many who have already filled their quotas for the year) may be reducing down to just a smoldering ash. -MD
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