Stocks continue to bolt higher on earnings. AMZN was spectacular in late October, PCLN in early November. Just yesterday CTRP had a more modest gap to 52 week highs, but it was impressive nonetheless because the stock had run into the report.
So what’s the problem? Participation. There’s no volume in the market on up days. And on down days, like yesterday, it spikes higher.
That’s a sign that institutions, whose money is needed to move the market, aren’t so eager to commit. You should follow their lead.
After the market appeared to flout yet another more serious correction we posted a number of long ideas on our sister site. Most of them stopped out. As we’ve mentioned before, when technically sound ideas do not work it is because you are fighting the market’s true intentions.
There are stocks that continue to perform impressively. We mentioned a few earlier in this post. But their list is thinning. That’s another warning that shouldn’t be ignored.
The market can continue higher. The massive amount of liquidity floated by central banks worldwide has clearly led to a rise in all asset classes and continues to under gird the stock market. It might well continue to do so, but that doesn’t mean the market cannot abruptly correct.
We believe all but intraday traders need to be cautious in the absence of robust upside volume.
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