Strong Gains Come On Heavier Volume; Volume Still Below The 50 Day Volume Average (Institutions Were Not Buying On Tuesday)
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Today was a very strong day for all the market indexes, as laggard stocks led the market higher on higher volume. However, that higher volume was below the 50 day volume average on the NYSE and the Nasdaq. Not only that, the IBD 100 and IBD 85-85 index, which is loaded with leading stocks that historically outperform the market by a 2.5x margin during uptrends, were up 3% and 2.7% respectively. This was even worse than the DJIA 3.2% gain which is a clear sign to me that there is no reason to declare a bottom here.
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Was the volume really
Was the volume really laggard? It seems that over the last quarter (the last 50 days included), high volatility created unusually high volume thus skewing the volume 50-day MA upwards. If you project out a bit further, I think you'll find that volume from yesterday was average to strong compared to more typical days in the market. Not a truly ringing endorsement of a turn around, but not as bad as the initial look indicates.