Sunday, April 12, 2009

Market Volume In Downtrend

The market's recent move higher since March 9th has certainly been impressive. A number of technical indicators are supporting this positive trend; however, volume continues in a downtrend. The more pronounced volume decline can be seen on the below chart of the weekly S&P 500 Index ($INX), keeping in mind this past week was a holiday shortened one.

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s&p 500 index weekly chart April 9, 2009The daily chart shows resistance at the 875 level for the S&P 500 Index ($INX). Additionally, the Money Flow Index has been trending lower since reaching near 80 on March 26th.

(click to enlarge)

s&p 500 index chart April 9, 2009Given the improvement in investor sentiment, the declining MFI and the lower trending volume, I would not be surprised to see the market digest some of the recent gains near term. Earnings reporting season swings into full gear and some reports could trigger some corrective action.

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