Chart Courtesy of StockCharts.com
The Dow Jones Industrial Average Diamonds ETF (NYSE: DIA) broke
out to a new high from the recent bottom on 8-2, but the S & P
SPDR ETF (NYSE: SPY) ETF did not quite get there.
Chart Courtesy of StockCharts.com
If you owned Diamonds, you did all right on Monday. If you owned SPY, you did
a little bit less well, if you measure success based on a breakout. The only
problem is that volume wasn't particularly convincing on either the Diamonds
or on SPY.
And it's the volume problem that makes the rally suspect, although it's hard
to know what may or may not happen on any given day.
The notion that the Federal Reserve is about to find a creative way of easing
monetary policy further is one thing keeping stock traders in a more positive
mood. The other, at least in the short term is that this is the first week of
a new month and that new institutional money is coming into the market.
So, the two things to watch for are volume and what happens as this week progresses.
Friday's unemployment report will be casting its shadow over the market by Wednesday,
as the private industry employment reports start to stream out. And Thursday,
we get jobless claims.
The first glimpse into the employment situation was the ISM manufacturing index's
employment component, released Monday. That was positive, coming in at 57.8,
having grown for 8 months and picking up its rate of growth. Other parts of the
survey, though, were showing signs of decline, especially new orders, production,
inventories, and backlog of orders, suggesting that even if we get a bump in
the employment situation in July, it may not last.
The bottom line is that we'd like so see more volume on days in which the market
rises, and that Friday, as has been the case for a long time now, will be a market
moving day after the employment report is revealed.
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