Thursday, September 03, 2009

A Quick Look at the Market's Volume Dynamics

Note from the Market Delta chart how we could not build volume and accept value above ES1000, instead creating a volume bulge around 999 (side histogram). With the market's false upside break, we saw significant selling volume push the market below its Wednesday lows (bottom histogram). The rejection of that volume region at 999 was a nice tell that we were seeking value lower. I'm now looking to see if we can stabilize at the morning lows and find buying interest, given the number of sector non-confirmations mentioned in the recent tweet (follow here).

It's a nice illustration of how seeing where we don't build volume and where we do can provide useful clues as to the short-term demand and supply in the market.