Everyday Is Groundhog Day
Once again, the major stock indexes have found a low by the noon hour and then floated higher into the afternoon. Nearly everyday we see the same pattern repeat over and over. The trading volume remains extremely light which generally favors the upside in the stock market. Traders must remember the old market adage that states, never short a dull market. The words light volume can be substituted for dull. Since December 19, 2011 the average volume in the SPDR S&P 500 Trust (NYSEARCA:SPY) is around 120 million shares a day. The three month average volume in the SPY is around 210 million shares. It is easy to see what a dull market this really is at this time.
Traders must continue to watch and follow the U.S. Dollar Index Index very closely. When the U.S. Dollar dips the major stock indexes flips higher;. the opposite is also true when the U.S. Dollar Index rallies. This is exactly what we have seen today and nearly everyday since mid-December. Everyday is Groundhog Day in this market.