Reflections on Volume

Big volume without further upside equals distribution
Big volume without further downside equals accumulation

Volume tends to peak at turning points
Volume often precedes price movement
Volume is a relative study

Wednesday, March 16, 2011

Tokyo Shares Rise 5.9% After Tuesday's Slide; Recover 9000 Mark

TOKYO (Dow Jones)--Tokyo stocks pushed 5.9% higher early Wednesday after suffering their biggest one-day fall Tuesday since the Lehman shock in 2008, helped by a gain in the futures market.

The Nikkei Stock Average was recently at 9124.36 points in fairly heavy trading volume, recovering the 9000 mark, though it was some way from recouping the large losses of earlier in the week which came in the aftermath of the country's devastating earthquake and tsunami. The Nikkei slumped 10.6% on Tuesday after a 6.2% slide Monday.
"There appears to be buying back by hedge funds following yesterday's panic-selling," said Cosmo Securities equity strategist Toshikazu Horiuchi. "But unless the nuclear power plant issues are resolved, the reconstruction efforts will not be able to start and only then can we gauge the impact on earnings." He expected trade to be volatile, pegging the Nikkei's resistance level at 9500 points.

All eyes remained on the nuclear situation, with a new fire breaking out at Tokyo Electric Power Co.'s No. 4 reactor at the Fukushima Daiichi plant in quake-ravaged northeastern Japan.

Dow Jones Newswires
March 15, 2011 20:33 ET (00:33 GMT)

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