NATV:NYTV Nasdaq/NYSE Volume Ratio Daily Chart Signals Market Top

Volume matters in trading.  When traders are running into the tech-weighted Nasdaq (shown by higher volumes and higher ratio numbers above 2.50), markets are strong and tech leads (green circles). As the tech sector lags in volume, this indicates market bottoms (red circles). The red circles show significant market tops and the green circles show significant market bottoms. The September top occurs which leads to the mid-November bottom which leads to the top just before Christmas as the fiscal cliff negativity grew, then the politicians provided the resolution to start the year and the markets recovered. Interestingly, the three low red circle prints are at three-month intervals; 9/21, 12/21 and now.

The basic concept of the chart is that tech leads a strong recovery and rally. When tech leadership fades away, traders will chase the broad market instead of tech, squeezing out the last bit of juice in the blue chips.  If tech is not leading, the markets typically stumble.  Note the big drop in semiconductors on Friday; watch SOX and SMH this week.  Chips go into near everything you buy these days so a chip industry slowing is not encouraging. The week ahead proves interesting. Projection is for the broad indexes to sell off moving forward. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.