September 9, 2020, 12:44 pm EDT
Pay Attention to Volume
Without any special news, stock markets rebound and up +560 points or +2% in DJIA. Almost all mega technology stocks are up: ZM +11%, NVDA +7%, TSLA +6%, MSFT +5%, QCOM +5%, AAPL +5%, AMZN +5%. After three big down days and one big up day, what should we expect from the next market action ?
Technical analysis or charts may provide important hint for potential next step which is volume. “Volume Precedes Price” means that the majority of stockholders or institutional investors are influential for the next directions.
From the featured picture of QQQ (Nasdaq-100), we can see three down days came with very high volume. Thus. if the volume of today’s rebound or within the next few days are lower than those three days, it indicates a weak rebound. Then, we can expect the downtrend would resume after the rebound. If the rebound volume is strong, then it is likely that stock markets can recover fully or even make a new high.
Let’s watch volume closely to see if it provides a clue for the next move. Currently, it looks like the volume is on the light side.