Tuesday, March 2, 2010

Russell Kisses Old High

In the previous blog post, a reader commented that volume is lousy and he/she does not even follow it anymore. I sort of agree because we don't put volume in the bank. We also cannot fault anyone for making money when a stock goes up without volume. Lack of volume did not make it a bad trade.

So in this low volume environment, we can rejoice in the fact that the Russell 2000 just kissed its old highs! Break out the sham-pain.

The problem with low volume is not that the market cannot keep going up. It is that it has nothing to protect it from even the most minor of shocks. Investors will flee - as in run for the hills - at the sniff of bad news.

It is not where I want to play as I don't get enough sleep as it is.


Ramu said...

Given that recent correction is over. Or lets assume its over. Do you expect the rally can move on for another 10%? For qqqq, I see 48.2/50.3 as possible next stops (unless some macro-eco event happens).

Quick Takes Pro said...

The rally can do whatever the government says it can do (via liquidity and rhetoric).

Cynical? You bet.

I do not see significant new highs.