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Markets Run Out Of Air As More Distribution Seeps In. Market Volume Update.

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Markets rose on Wednesday only to land right back where they left off from the previous session. We ended up selling our SPY 417 calls for about what we paid for them on Tuesday afternoon. Overall volume fell and up/down volume was about even in a what turned out to be a session of mostly digestion and consolidation.

A week ago last Tuesday markets had what seemed to be a breath of fresh air with across-the-board accumulation. That breath turned out to be short lived and was followed by something you don’t usually see… more distribution.

Now it’s pretty standard to have a shakeout after a good round of institutional buying, but 3 out of the last 5 days logged high volume distribution of some kind. Whether some of the big boys pulled the green light too early or the market is still very much in a state of the flux, one thing is clear is that the market needs more time to work things out.

On the other hand, TVO our volume oscillator, did manage a reversal, however, the values stayed the same for a day or too before changing direction. There has been a shift in sentiment, although, not a very decisive one (like the one we like to see for a long term entry signal), but it is a reversal just the same.

Big Tech continues to report earnings this week with AAPL and AMZN coming in after the bell on Thursday. Could smart money be holding their breath for the 2 mega-cap giants, and then in turn sparking an aggressive end-of-the-month rally? Well, that remains to be seen. It does seem, though, that the one thing the market has it’s mind made up on is that indecision is the name of the game for now. – MD

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