Morning Report – February 28th, 2014

The opening dip yesterday was bought by the strong hands after an early morning shakeout. This followed three days of the Composite closing well off of its daily highs. With the NASDAQ closing at a multi-year high at the high end of its daily range at 90.63% the market bulls indicated they want to push stocks higher.

The only negatives that I see are lighter volume on the push up, advancing issues only led declining issues by 1.77 to 1, new highs were flat even though the index pushed out to new highs, and the market is overbought. Because of the move up into a new high occurring on lighter volume, the Trade Guider software gave a no demand signal. Of course, this needs to be confirmed and the direction of the price movement and the daily closing range of the NASDAQ candle takes precedence. For now, the no demand signal is a warning that alerts us that prices are moving up without the conviction of heavier volume.

With that said, I remember reading a statement by Jesse Livermore that stocks can continue to move higher on lighter volume if there is little to no supply. In other words, any selling is absorbed quickly by buyers who perceive stocks at the current prices as a bargain. This seems to be what is happening now. Read Full Report