Pump Down the Volume

Huge rain storm today here! Many streets in Cambridge were under water. Luckily the ride home was not too bad. No need to water the grass this week.

Pump Down the Volume
One of the things I really pay attention to is volume in the markets. Buyers and sellers vote with their feet and will run into or out of a stock at various points. One of the more frustrating things the "new" market since 2009 features is a real lack of volume, especially in uptrends. Zero Hedge had this headline up today that many were calling whining:
Market Stages Tremendous Rally.... On 40% Of Recent Volume
To be fair, all the heavy action the last couple of weeks was on very high volume so a drop off is not strange in and of itself.

So is volume important anymore? It's a good question. I still will base a buy on volume backing up something I see. With all the money that has left the markets over the past couple of years maybe volume is not that big a deal anymore. Surely as it relates to the major index trackers it's all but useless.

The rally from last Thursday to now has been large, but is there anything behind it? Here is a chart of HRL, note the volume at the bottom of the chart:

It is clear the recent bounce has come on less shares being transacted.

I wrote in my trading notebook (yes I still write stuff like in the dark ages) last Friday:
"Worst case is a huge bounce on no volume; not tradeable"
Yup, and here we are.

The chart for the S&P 500 shows the same, and note the levels I have marked off for the index as the moves seem to find old levels. This is where charting is helpful:

I had figured a close over 1200 would come this week and I was thinking of getting involved should it do so. Of course it did it today. Another V shaped blast off on the way? I would not be shocked, but this time the technical damage is so bad it would be far better and constructive for the market to base sideways for a time. A furious run up from here is not going to have a calming effect. Turnaround Tuesday is on tap, will see how it goes.

Robots On the Rise
My friend Mark seems to think his post tonight is funny, but it's just another sign of human handing the keys over to the robot overlords:
The Future American Worker
President Obama gave a speech at a robotics manufacturer and said:

"You might not know this but one of my responsibilities as Commander in Chief is to keep an eye on robots, and I am pleased to report that the robots you manufacture here seem peaceful, at least for now."

Total slip! He gave it away but acted like it was a joke!

Have a good night.