March 23, 2022, 12:14 am EDT
Strong Rebound with Weak Volume (QQQ)
It was a strong rebound rally for the past 6 days. Nasdaq or Nasdaq 100 made nearly +12% gains which usually takes a year to accomplish. Mega tech (AAPL, GOOGL, MSFT, AMZN, TSLA, NVDA) helped to reclaim bullish bias for all trend lines (20, 50, 200 day-moving-average). They quickly rescued themselves from dropping into a deeper hole.
However, we can see that the volume did not show a similar strength with its price action. In fact, the volume pattern seems to suggest a weaker direction along with the rebound. Therefore, it discounts the bullish effort.
Sometimes, sharp drops and spikes confuse traders and investors a lot. We pay attention to volume patterns because volume cannot cheat. Only consistent higher volumes give the momentum, either upside or downside.
Having war, inflation, and higher rates, the future is still full of shadows. Therefore, we keep our positions on the defensive side.