Today we got the stock market pullback that we anticipated yesterday (read that post here). As I write this a few minutes before the closing bell, the S&P 500 is down about 13 points, now trading right around the 1100 mark.
According to the Associated Press, volume is lighter than Monday’s session – with volume at 559 million shares today, compared with 609 million shares traded at the same time on Monday.
So we’re seeing the price action we anticipated (down), but not yet the increased volume action we’d like to see for this leg down to have some mustard. We’ll see if tomorrow’s session shows an increase in volume to correspond with the move to the downside.
To recap: From the 1040 late May lows, stocks retraced about 50% of their previous decline. Most of the retracement occurred on anemic volume. Hence we’re concluding that this drop could be the start of something larger – but we’d like to see the volume to prove it.