9 Minute Read

Tackle Today: Never Short a Dull Market

August 30, 2021

By | No Comments

Low-volume days are bullish.


Once upon a time, I thought low volume up days were a sign that strength was waning, that momentum was petering out. I’ve since been disabused of the notion, and the chart below tells you everything you need to know about just how bullish those low volume rallies can be.

Here are a few key takeaways to today’s volume-focused message.

First, volume is secondary to price. If a stock rises 1% on low volume, you get paid the same as if it had risen on high volume.

Second, high volume up days are known as accumulation days and suggest institutions are gobbling up shares. These are bullish too.

Third, high volume down days are known as distribution days and reveal institutions are selling shares. View these as red flags.

Fourth, just because high volume days are bullish doesn’t mean that low volume days are automatically bearish. Above-average participation often occurs during corrections and downturns. Low volume usually accompanies extended uptrends.

Fifth and final, a lengthy low volume period can often indicate that there is no news worrying investors right now. Thus, prices push northward.


Chart of the Day

Never Short a Dull Market

Source: @bespokeinvest

The dark blue line shows how SPY performed over the past decade on above-average volume days. The green line shows how it performed on below-average volume days. Notice the grand canyon of difference?

Video of the day

Coach Frank’s Charts

Coach Frank always brings us some beautiful charts to look at. Check out the segment starWatch this clip from Friday’s Halftime Report where the coaches analyze Frank’s charts and discuss their potential trading setups on stocks like Microsoft, Trimble, Starbucks, Amphenol, WestRock, and Linde.

Today’s line up

Traders Lounge 11 AM EST

Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.

Halftime Report 12:30 PM EST

The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.

Weekend Reports

Watch the Stock, Options, Commodity and Forex Reports to help you prepare for the week.

Tackle Trading: Financial Freedom is a Journey. Sign up now for a 15-day free trial.

Financial freedom is a journey

The Tackle Today series is brought to you by Tackle Trading.

Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.

Sign up now for a 15-DAY FREE TRIAL #

Legal Disclaimer

Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses, and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.

All investing and trading in the securities market involve a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax, and accounting advisors, to determine whether such trading or investment is appropriate for that user.

Leave a Reply

Chart Modal

Tackle Trading