The markets tend to float higher on light volume. Even though today should mark a natural turn in the stock market, we didn’t see much downside other than early in the morning hours. The culprit – no volume to speak of.
In order for the markets to see any significant downside pressure, we must have a catalyst for the media to latch onto and scare the folks who were last in – to first out. This would get the party started on the downside.
In the video’s each night I discussed the fact there is one more number that should be reached on the upside, and I think that has something to do with the lack of selling.
To most investors and traders, the market seems like it works in mysterious ways. However, those that have a keen understanding of how the market works recognize that there are forces that push and pull the markets in certain directions.
A current, simple and good example of this is Yahoo. (YHOO) This stock has been creeping up toward the $50 level in recent days. Markets like to hit big round numbers, and that’s exactly what we say today. The stock was pulled to that level over the last several sessions and today blew right through it. In fact, Yahoo made an announcement today that they were making an acquisition of an online advertising company BrightRoll. Under normal circumstances, the acquiring company would be down on the news, but not today, the force to get through $50 was stronger than the news of the purchase.
Check out the video below for the rest of today’s commentary and analysis.