S&P 500 volume was low today (63% of the prior low) and market internals were good enough to call another successful test of the 1257 low. That means we would issue a buy today. We could still see some rough days next week though, because the volume on the entire NYSE was pretty high. This happens occasionally when part of the stock market indicates a buy when the market as a whole does not.
Normally, I’d interpret it as a chance to Buy the S&P 500 (where the successful test was) while it may take a few more days before the rest of the market comes around.
It isn’t so clear this time since the test on the NYSE looks like it failed on high volume since we went below the previous successful test on higher volume.
Bottom line: We have a bit of mixed signal so my inclination would be to wait for some more information before buying. This discussion assumes you have some cash available for buying stocks. (I don't since I am fully invested at 50% long, except for the trading portfolio where I could put some trading money long.)
One of the Rydex long funds we use for sentiment analysis had twice as much volume on the long side at the close today when compared to yesterday. In other words, a lot of people think that today was a good day to buy.
The NTSM analysis was a HOLD today.
Since volume analysis called a Buy last week on the Successful test of the prior 1257 correction low, I upped my investment position to 50% invested in stocks overall.
I am tempted to go long in the trading portfolio, but I think I’ll wait for confirmation from NYSE volume.
