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

Friday, August 12, 2011

Stocks soar on small positive economic signs

NEW YORK (AP) -- Wall Street's wildest week since 2008 continued with another 400-plus point move for the Dow on Thursday. This time, stocks shot up after investors saw small signs that the economy might not be headed into another recession.

Fewer Americans joined the unemployment line last week, and a technology bellwether said revenue could grow faster this quarter than analysts expected. The news pushed prices on long-term Treasurys down, and gold fell from its record high.

The Dow Jones industrial average rose 549 points, or 5.1 percent, to 11,269 at 3:45 p.m. in New York.

During a calm market, a 400 point move would rank as the Dow's biggest in months. During this volatile week, it's the smallest. On Monday, The Dow plunged 634 points only to gain 429 points Tuesday and then sink 519 points Wednesday. If the Dow stays above 400 points through today's close, it would be the first time in its history that it had four-straight 400-point days.

Such big up-and-down swings are reminiscent of 2008, when the financial crisis battered stocks. The last time the Standard & Poor's 500 index rose or fell by 4 percent in four straight trading days, as it has just done, was Nov. 19, 2008 through Nov. 24, 2008. Over that span, the index went from down 6.1 percent to down 6.7 percent to up 6.3 percent to up 6.5 percent.

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