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After The Fed, Markets Stayed Cool. Weekly Market Volume Outlook.

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Markets recovered sharply after the Fed spoke on Wednesday afternoon and apparently gave some investors something that they wanted to hear. According to declining overall volume on the session, however, most of the big institutional investors were apparently not really paying much attention… Or perhaps what they heard from the Fed was already old news to them. We did get a major volume accumulation day last Wednesday, and even though a dive down through the 200 day moving average immediately followed, overall volume continued to rise.

But if we look closer at our Heat Gauge (HG) over the past week, the Real Feel stayed mostly in the SWELTERING range (not very hot) during the down days, while the up days were in the 3-DOG NIGHT category (pretty darn cold). What this means in laymen’s terms is that regardless of price direction, up volume has been far more prevalent compared to down volume, and whether or not price agrees at this point in time, a bullish outlook is how smart money is currently playing their hand.

Incidentally, aside from being a cool band from the 70’s, 3-DOG NIGHT is a term used in the arctic to describe a night seriously cold enough to warrant keeping three dogs inside to help keep warm. When our Heat Gauge is this cold, make no mistake, the buying is quite serious. But how does today’s post-Fed buying spree measure up on HG? We finished the day at COOL, so no real accumulation, but since TVO, our long term volume oscillator, is now well above zero – which puts our long term portfolio of stocks into LONG or buy mode – a trend of likely accumulation to come has been firmly established. – MD

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