The up to down volume ratios on both the NASDAQ and the NYSE yesterday were both modestly impressive registering ratios of 4.4 to 1 and 3.6 to 1 respectively , however the accompanying ratios of advancers to decliners was not so impressive at 1.59 to 1 and 1.97 to 1.
Because not more stocks participated in the rally today's bump was more likely continued short-covering. To get a more sustainable, long lasting move up we need to see a show of force on the part of institutions (collectively still the largest players in the marketplace). The way you observe this is to see heavy volume and additionally to see both the up to down volume ratios and the advance to decline ratio BOTH register aggressive days simultaneously. These kind of readings would suggest institutions are stampeding back into the market with real buying power.
Again until we see this happen there may be violent rallies to makes some opportunistic trades, however don't expect a steady durable move up.
by Peter Greene
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