Markets continue to follow the “V”, the magic bottom and instant recovery. As we suggested the recent low has played out just like the January one as we are seeing the $SPX advance every day now. So game plan as usual? New highs coming? CNBC is certainly busy making the case with a non stop line-up of bulls projecting higher prices and not a worry in sight:
Yet I’m beginning to notice some differences in the underlying stats. For one volume compared to January/February is just pitiful:
Half maybe? But volume doesn’t matter they say and it’s summer so who cares right? Maybe, but I like strong volume and convicted buying as it also builds support, but that’s just me I guess. But there is something else that I noticed that looks quite a bit different and that’s the $NYAD.
Here’s the recovery in the days following the January/February low:
Positive numbers throughout. Compare to now:
Not so hot is it? That doesn’t mean markets can’t push higher or make new highs, but it does show that this rally, as strong as it has been, is being built on a much weaker foundation than the one in January.
We shall see.