Interesting volume pattern

Volume can tell you a lot about the direction of the market.

Gold, for instance, spiked in January with strong volume. It was a sign gold had to rest for a protracted period of time. And it did.

Strong volume is bullish when it happens at the end of a correction. It is bearish if it jumps at the end of a rally.

What caught my attention has been the sharp rise in volume in XLF (the financial ETF)(click on the chart to enlarge it). It is too early to say for sure. But strong volume and no action in the price after a strong move it is not good news.

This pattern should be watched closely because it may have repercussions on the overall market.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

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