Internals ended the day mixed. Volume fell on the Nasdaq by 0.6% but closed higher on the NYSE by 2.3%. Advancing volume topped declining volume on the Nasdaq by a ratio of 1.4 to 1 but declining volume held the upper hand on the NYSE. By the closing bell, declining volume outpaced advancing volume on the Big Board by a factor of 2.1 to 1. The higher volume and higher declining volume on the NYSE suggests institutional selling and we would therefore classify yesterday as a distribution day on the NYSE. But if not for a late session rally, yesterday’s results could have been much worse.
Over the past month, on three separate occasions, the Market Vectors Indonesia ETF (NYSEARCA:IDX) has attempted to rally above the $30 mark. Yesterday, on a burst in volume, IDX gapped lower on the open, but reversed to close near session highs. A move above Tuesday’s high of $29.98 could present a :
On May 1st, the ProShares Short MSCI Emerging Markets ETF (NYSEARCA:EUM) formed a reversal candle as it undercut support of its short term uptrend line and tested support of its 50-day May, before recovering to close in the upper third of its intraday range. A volume-assisted rally above the four day high of $29.63 could provide a buy entry trigger in EUM.
The broad market continues to show signs of weakening. Nonetheless, one big “accumulation day” (higher volume gain) could change the complexion of things quickly. We remain cautious about the market and will continue to limit the number of trades we enter and keep position size small.