Low volume is good. Means there is a cessation of selling pressure. It's more likely a buyers strike. No one wants to get long until that exact moment before the Fed eases. So they keep their money on the sidelines waiting for that right moment to pounce. Meanwhile as the averages near the lows set last Dec 21st, there are plenty of stocks that are holding to higher levels than when we were here before.
Look at how few new lows there are today compared to a couple weeks ago when we hit 2300.
A lot of the selling pressure in the Nasdog is from high fliers like biotech and bubble stocks like BRCD, JNPR and B2B junk. Some didn't want to sell these until after the new year to push out tax gains. I was hoping some of the winners would get sold here in January, and expecting that money to be put to work in beaten down losers. Well, INTC, DELL, WCOM, AMAT, and other losers like that that have been sold out for the last couple months are getting some money. Unfortunately my SUNW and CSCO were later to fall so it seems that they are taking their sweet time--there are still some sellers left.
It seems like the best bet is to buy stocks that broke down and warned a few months ago, as opposed to strong companies like EMC, CSCO, SUNW who said their business still looks to be on track. Oh well, I have some of both--good companies that I don't think will warn, and some that have been really ugly and everyone expects to miss. |
