{"id":1388,"date":"2009-07-08T19:32:22","date_gmt":"2009-07-09T00:32:22","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=1388"},"modified":"2009-07-08T19:32:54","modified_gmt":"2009-07-09T00:32:54","slug":"low-volume","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/low-volume","title":{"rendered":"Low Volume"},"content":{"rendered":"<p>Today was the perfect example of how we need higher volume to confirm a break of support. \u00a0We see this with stocks and the overall market. \u00a0We need levels to be broken with significant volume as confirmation. \u00a0And today we did not see this.<\/p>\n<p>SPY over the past two days have violated 88.50, which was a level the market had not closed below since the middle of May. \u00a0Today we violated SPY 88, an important level as we have traded in a range for the past two months primarily between SPY 88 and SPY 93. \u00a0And our next level below SPY 88 was 87.50 which  was also violated today. \u00a0But we saw all of this on very light volume.<\/p>\n<p>The best example of our light volume was the move with V below 60 with SPY breaking 88. \u00a0Yes V eventually traded down to 58 as SPY traded near 87. \u00a0But we saw no institutional seller step into V into this downmove. \u00a0I saw no aggressively held offers on the way down. \u00a0There wasn&#8217;t the hitting of bids and low offers stepping down that we would expect. \u00a0There was a slow leak lower. \u00a0And it was all on light volume.<\/p>\n<p>So when we see this do we forgo the short? \u00a0No. \u00a0We short market stocks below levels and watch the SPYs as an indicator for confirmation. \u00a0And I did this in V today. \u00a0I was short. \u00a0But at no time did I aggressively get short because of the low volume. \u00a0I did not see an aggressive seller.<\/p>\n<p>So I was short, but carefully. \u00a0Lil Mike and I held V all the way to the bottom near 58 where we covered. \u00a0We caught almost the entire move down. \u00a0If I had seen aggressive sellers than I would have shorted with more size.<\/p>\n<p>And then when we started to see the market rebound into the close I was quick to cover my FCX short. \u00a0And in fact I focused on getting long FCX, even though we were still below SPY 88. \u00a0The volume was too low for me to make much of the fact that we were below SPY 88. \u00a0I was <a href=\"http:\/\/www.smbtraining.com\/\">mentally agile<\/a>. \u00a0And I caught some of the upmove in FCX.<\/p>\n<p>Anyway, watch the volume when levels are broken. \u00a0And levels broken absent significant volume should be traded carefully on the short side.<\/p>\n<p>Best of luck with your trading!  Don&#8217;t forget to <a href=\"http:\/\/twitter.com\/smbcapital\">follow us on Twitter!<\/a><\/p>\n<p><img decoding=\"async\" class=\"alignnone size-full wp-image-1391\" title=\"SPY 2-day 07-08-09 with levels\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2009\/07\/SPY-2-day-07-08-09-with-levels.bmp\" alt=\"SPY 2-day 07-08-09 with levels\" \/><\/p>\n<p><img decoding=\"async\" class=\"alignnone size-full wp-image-1392\" title=\"SPY 3-month 07-08-09\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2009\/07\/SPY-3-month-07-08-09.bmp\" alt=\"SPY 3-month 07-08-09\" \/><\/p>\n<p><img decoding=\"async\" class=\"alignnone size-full wp-image-1393\" title=\"V 07-08-09\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2009\/07\/V-07-08-09.bmp\" alt=\"V 07-08-09\" \/><\/p>\n<p><img decoding=\"async\" class=\"alignnone size-full wp-image-1394\" title=\"FCX 07-08-09\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2009\/07\/FCX-07-08-09.bmp\" alt=\"FCX 07-08-09\" \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Today was the perfect example of how we need higher volume to confirm a break of support. \u00a0We see this with stocks and the overall market. \u00a0We need levels to be broken with significant volume as confirmation. \u00a0And today we did not see this. SPY over the past two days have violated 88.50, which was a level the market had &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/low-volume\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,10],"tags":[196,30,18,170],"class_list":["post-1388","post","type-post","status-publish","format-standard","hentry","category-general-comments-2","category-mike-bellafiore-bellas-blogs","tag-fcx","tag-prop-trading","tag-smb-capital","tag-spy","no-post-thumbnail"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Low Volume | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/low-volume\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Low Volume | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Today was the perfect example of how we need higher volume to confirm a break of support. \u00a0We see this with stocks and the overall market. \u00a0We need levels to be broken with significant volume as confirmation. \u00a0And today we did not see this. SPY over the past two days have violated 88.50, which was a level the market had ... 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