The market was off -1.6%. That looks an ugly number, but maybe...

The market was off -1.6%. That looks an ugly number, but maybe it wasn’t so bad from some aspects. The Advance/Decline Ratio was only 0.8 today. That’s mild considering the size of the drop. So the fall was carried by some heavy hitters in the blue chips.

Today was the fifth day in a row that volume was below 1Billion. I’ve often commented that, outside Xmas, volume below 1billion is not common. Two days below is rare, Three days is rarer still. Five Days?

We have to go back to early/mid July 2010 to see a similar performance. Then we saw a rise on low volume, followed by a retrace on low volume and the start of the long bull run up until February 2011. There were hiccups along the way, but a good solid six months run up did occur from early July, 2011.

The low volume since early October, on the run up and now on the run down, is typical of no demand – under such conditions it doesn’t take much to tip the market over. On the other hand, only a small increase in demand would send this market higher. So buyers are simply holding off

Looking at the chart, the mid-line of the Bollinger Bands beckon. Then horizontal support around 4040. That’s around where I thought this retrace would finish. If the chart makes it all the way back to the bottom of the Bollinger Bands – we’ll have to watch carefully what happens.