It Takes Volume To Be Bullish

A market that rises without real demand is a market that is whistling past the graveyard.

Shares battled back for the second session Monday following last week’s harsh selling. But the rally coincided with tepid volume, doing little to instill confidence that there is enough demand to sustain the seven-week advance.

After a market puts in a low and begins rallying, it is preferable to see that rally occur on strong volume. This is a sign that large investors, the lifeblood of any durable advance, are on board. However, after a market advance goes roughly six to eight weeks without at least several major accumulation days showing up, it is time to be concerned about the sustainability of that rally.

This lack of market volume was evident just prior to the end of the 2002-2007 bull market in mid-October 2007. It was also apparent during the six weeks leading up to the May 2 peak in the Standard & Poor’s 500 Index

The adage “it takes volume to put stocks up, but stocks can fall of their own weight.”

A brand-new bull market will typically see emerging leaders break out of bases and move up 20%-25% or so before pausing to digest their gains.

Adapted from: 

Demand wanted

By Kevin Marder

Sept. 27, 2011, 12:01 a.m. EDT

http://www.marketwatch.com/story/demand-wanted-2011-09-27

We Are On Our Own

When it comes to our money, don't trust anyone . In the end nobody cares more about our money than we do. Advisors can be counselors in a crisis market . But they don't have any more of a clue than you or I as to the future of the economy or stocks. Nobody has lived through a previous global deleveraging , coupled with instantaneous communication of every bit of noise as exists today. We are on our own.

Fear Of A Worse Tommorrow

We are afraid not just of today's terrible markets but of a worse tomorrow.

We feel like bystanders in our own financial lives—almost as if we were spectators at a racetrack equally incapable of stopping an impending car crash and of tearing our eyes away from it.

In the short run, it always feels better to be a buyer when the market is euphoric; in the long run, the investors who make the most money are those who buy when the market is miserable. For investors full of anger and fear, however, benign neglect might be the best they can muster

- Jason Zweig

http://online.wsj.com/article/SB10001424053111904070604576518584290614602.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsSecond