After an early bounce from late pre-opening selling, stocks have fallen into a narrow range, hovering near their day's highs. Note that buying pressure has remained high through the day (NYSE TICK; bottom chart), with the moving average of TICK (green line) consistently above zero (blue horizontal line).
So why hasn't the buying pressure translated into sharply higher prices? As we see from the ES chart (top), volume has steadily decreased as the session has moved along (blue arrow). Indeed, we've been trading below average volume for most of the day.
So what that tells us is that large institutional participants are largely out of the market, but the remaining participants who are active (market makers, prop traders, etc.) are leaning to the buy side. That keeps the market aloft, even as we find it difficult to generate the juice for a fresh trend leg up.
Should we continue to see buying pressure and a pickup of volume, we could get a significant breakout move to the upside. A breakdown of the buying interest, however, would likely lead to a retracement move back into the thick of the day's trading range. Until either volume or TICK budge (or both), it's a market offering little short-term trading opportunity.
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