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Institutions Take A Breather As Markets Grind Higher. This Week’s Market Volume.

flashing sparks coming from the angle grinder

Volume fell substantially across the board in Wednesday’s session as the market listened to what the Fed had to say. The indices did get a jump, but rather than assume investors liked what they heard (do you really think the rally today was all about 25 basis points?), I prefer to think that what they heard was somewhat expected. And taking into consideration last week’s huge volume boost, today was just some of the big institution’s taking a bit of a breather.

We did get a Nasdaq volume accumulation day on the last day of February this week, however, the first day of March was firmly back in the distribution category. As a result, TVO, our long term volume oscillator, continues to drop. Conversely though, our Issues Oscillator is headed back up, so it would appear that the retail investor crowd now has the ball in their court. Whether they decide to run with it remains to be seen. One thing that remains certain is that even though the retail crowd is usually the last to pile on, the smart money folks are still very much in the game at this point.

We can expect to see a bit of turbulence on SPY between here and the 200 day moving average. It’s likely that Friday’s jobs number will be another non-surprise. As long as geo-political events stay somewhat expected (I know a war shouldn’t really be described as such, but it’s always been uncertainty that shakes markets, not war itself), there’s not much else standing in the way of a slow grind higher. – MD

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