The Dog That Didn’t Bark

Just a quick post to note Friday’s low volume rally. This is pretty unusual given that Friday was “employment report Friday” (i.e., the first Friday of the month, which is the day the first big monthly economic indicator comes out – the employment report). Often the market sees lighter volume the day or two before, then a big pickup the day of the report.

The low volume also looks funny because…

…the major indexes rose to multi-year highs but volume fell. That type of action is called stalling, which occurs when major indexes have a significant up day and/or close at or near new multi-year or all-time highs on low volume. Friday major indexes, such as the DJIA, S&P 500, NASDAQ Composite and S&P 600, closed at or near multi-year or all-time highs on low volume, hence stalling. Funny, huh?

So we had two reasons why you’d expect volume to increase if the market was acting “normally.” To me this is a clear case of “the dog that didn’t bark.” Could be an important tell.

Another “funny” thing is Thursday’s tall upper shadow, which shows some selling came in intraday. But most funny of all is the massive volume six trading days ago that was reviewed extensively in my April 28th posting, which showed five interesting charts and raised the possibility that the huge volume was stealth distribution (i.e. professional distribution on an up day).

To me, that stealth distribution six days ago and Friday’s stalling action / dog not barking add up to a MAJOR WARNING SIGN. Cheers!

PS: No new CROX updates for me right now. Going to see how Friday’s intraday reversal develops. If/when I listen to the conference call reply and have some things worth commenting on I’ll see if I can post them here.

Index of CROX postings
Crocs on

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