The month of July started out with fireworks (a +67% jump in volume the day after the holiday), but instead of going down in flames, the market tested the 50 day and soared back to all-time highs. Will the heat rise once again in the start of August? Well, the Nasdaq did squeeze out a couple of distribution days in the past few sessions. The big board, however, is holding its ground, and from look of TVO (still in the HUNGRY category), it’s still a long way off from rolling over.
Of course, the “Outflows of August” crowd has now reared its head… soon to be followed by the “Worst month is September” folks, who then set the stage for the dreaded “Red October” contingent. Pay too much attention to seasonality and your portfolio may never make it through another season. From a volume perspective, though, light profit taking seems to be what the big boys are up to… Which means the shorts may have to get used to yet another frustrating correction of time (which has already started) rather than price in the near term. -MD
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