Please begin with bgu, the triple long large cap stock index. For some reason these derivatives have volume that is easier to read and less misleading than the usual indexes especially now when 1 or 2 low priced stocks like c or bac can do 1-1 1/2 billion shares as they have essentially become options hopefully without any expiration date. Please observe how the volume has been declining on the advance since 3/9. The volume dried up on the decline to 4/7 and was even less than the volume on the previous decline. The question is should we attribute the pitiful advancing volume 4/8 and 4/9 to the holidays. It would be much easier to do that if the financials had not traded so heavily on Thursday 4/8. We still do not have a large volume wide range day and that is the issue. Was 4/8 just a continuation in spite of all the fireworks of the poor demand days we have seen so frequently over the past week or so?First look at the 5 minute pnf .1x1. No supply here. Prices react a fraction of the overnight gap up. They are supported where one would expect 84.6 early in the day and then over the early highs at 85.2. Other than the gap up, I do not see any great runs of x's indicating demand overwhelming supply either. The only thing a little odd on this chart is the last "0" at 84.8. It is the last o a string of 3 0's when the immediately preceding rise was of 3 x's. Supply equalling demand? This was the largest down move since the little up move began at 84.6 and as such puts us on guard for a further downward move. Instead the market immediately goes up 6 x's. Funny. No great evidence of demand and when supply could kick in it does not show up.
Turning to the 5 min bar chart without the line drawn in for the xlf. We have a buying climax at 85.19 and are supported at 84.43 after falling on diminishing volume. At 11:50 there is no supply and the rally commences. This rally has even less volume than the preceding decline and in an upthrust position at 1:55 buying pressure is exhausted. Notice the selling that comes in at 2:00 and 2:10 followed by the break at 2:15 on the largest volume in hours. Unfortunately that wide bar closed midrange after falling into a spring position. It is supported on the next bar and then a sharp rally begins. The 2 bar buying climax 2:45,50 stops upward progress for the next hour until the final bar which looks like hypodermics.
Despite the 32 point gain for spx our analysis does not find any great buying during the regular session. Instead the market is supported when it needs it, like pulling a rabbit out of the hat.
While this is a fragile way to advance it can go on a long time, or change one way or the other quickly.
Please finally look at the 5 min chart with the xlf drawn in. The extreme strength in the xlf is masking the lack of demand in the spy. The spy is not going up on large buying but on an absence of selling pressure.
