Send Filthy Rich Dirt Poor
To Your Inbox
August 31st, 2022
Economic data came out on Tuesday and once again, the economy seems to be too strong and showing no signs of weakness. The issue is that demand is still too high and that won’t help inflation, which means a more aggressive Fed is coming, as promised.
I want to review some positive news about last Friday. Despite a 1000-point drop in the DJIA, the volume on the S&P 500 ETF, SPY, was still pretty low.
Look at the past during some of the other major drops in price and you’ll see volume increases into the drop. This last drop that started in mid-August never had that momentum in volume. Even on the day of the big drop (downward pointing arrow), the volume was still pretty low compared to the average volume over the last 4 months.
We know that the professional traders are coming back next week after the break and some of the algos may be on hold until people get back, but another point of concern is the number of indices that have broken under their 50-day simple moving average. This is a key indicator for many algos, pension plans, and retail traders.
Get notified about new articles, special events, training, and much more
To Your Inbox
Leave your info below to get more options and trading ideas to your inbox
Yes, send me news to my inbox.