Today's volume stands in sharp contrast to the very heavy volume of the decline preceding it. If this were a bottom it would be the third V bottom in a row after which there was a light volume rally.(But as long as we are looking at history, the second to last trading day of each month was some kind of high and the first day of each month was a sharp sell off.) The light volume might well mean that we are once again going up on the absence of selling plus a little short covering.
Here is an assignment. Go through today's action and find each possible instance of possible topping action, upthrusts, buying climaxes, shortening of the thrust etc; How can you tell they will fail well before a new high is made? Which of these is most likely correct? Why?Find the bars which are clearly short covering bars. Notice the closes in these bars. What does that tell you about the market?
Hints: For the first paragraph think ease of movement.
Second paragraph--So why are the closes in the middle?
You cannot have large volume unless large interests are playing. Given the low volume on the daily and your observations above what is the generic large operator doing?
