Volume Remains Absent As Stocks Drift Lower On Lower Volume

August 24, 2007

The stock market has, overall, been very boring this week and has, absolutely, given us ZERO direction as to which way the market wants to go. Yesterday’s move did produce some decent longs but none of them performed well besides the clearly best chart of the bunch. However, the fact that the market and those longs had little follow through today has to have us scratching our heads wondering, “is this the best the bulls can do after finding out Ben is now on their side?”

I am still in the either/or camp and am not leaning long or short at this time and continue to believe cash is the best place to be. However, I believe it is smart to stick your toes in on the best shorts and longs that show up in our scans so that you can be physically in lockstep with the market when the trend does start. By buying more of the best looking long yesterday I have set myself up for some nice future gains, if the market does follow through. However, if it does not, I have a clear cut loss area and have my toes in a handful of shorts that are holding their resistance.

The one short I have bought more of compared to the others also had a bearish reversal today, holding the recent resistance at the moving averages. So as you can see by these two stocks, along with all the small cut losses I have been forced to take this week, the market remains very unclear and trendless. The best place, once again, during a market like this, the greatest traders will tell you, is in cash.

The greatest traders knew when to go all-in. The greatest traders knew when to stay on the sidelines. I have read and reread the greatest all-time stock market classics over and over and I can tell you there is NO WAY IN HELL the greatest traders of all time would be all-in on the short side or the long side here. So I hope no one else is.

I seriously wish there was more I could report but when the volume is well below the 50 day volume average of the indexes and my scans are silent, it is hard to talk about something that is actually important. I guess I could ramble on and on about the Fed or the carry trade. But seriously, who gives a crap? How in the hell does that make me BIG MONEY in the long run? It doesn’t. In fact, to about 99% of you (and some of you don’t even know it, yet are paying attention to it) it only hurts. So I am not about to talk about nothing and waste my time and yours. Continue to take it easy. Trust me, when a trend becomes clear, I will be all over it! Aloha and I will see you in the chat room.

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Posted by Joshua Hayes | Filed Under Free Commentary 

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