It’s probably not a one-to-one relationship, but I bet there’s something going on there for sure.

I’ll have to do some behind the scenes work to see if I can figure out the relationship if any regarding volume in these key ETFs.

Rising volume – in a TA sense – isn’t always for reasons we think it is. Sometimes it takes a lot of digging to get to the source, and sometimes we may never really find it until the move is over, or the news comes out.

What I was thinking though, is that people (tech analysis fans) see vol increasing as we fall deeper into the abyss and think – shorts covering, buyers coming, capitulation/reversal must be on the way. And probably most of the time the vol increase was just due to the reasons we stated..

Great to have you from Brazil! I’ve had friends who have visited and loved it.

I’ve been keeping an eye on the Bovespa – you’ve had a much stronger run off the October lows than we have and the chart looks much stronger.

I suspect the best case scenario (for S&P) is an ABC move, wherein we got the first A up, we may be starting a quick/shallow B down here, and then a C back up perhaps as high as 800 but I don’t think we’ll get over 800. If we do, then we do, but it seems there’s so much confluence resistance there. Then we start the 5 down.

First of all I wanna congratulate you for the blog, my friends and I here in Brazil have been visiting it all the time since we found it !!!

Here in Brazil we have seen something pretty interesting happening with the Brazilian IBOV

As you may know, the IBOV had been very strong and to everyone´s surprise it didn´t test/lose the november low like Djia/SP500 and most European markets did, on the contrary, it went up every time the American indexes showed some sort of possible recovery..right now we´re about 30% above the november low…however, as I said before, it HAD been very strong, but in the last fews days things changed, while the SP/Djia rebounded almost 15% the IBOV kinda struggled to gain almost 5% as most investors believed this SP500 rebound wouldn´t break the 750.

Based on what you´ve seen/read/ and on your technical analysis, do you see any possibility the SP keeps moving straight towards the 800 or you stiil believe the 750´s wont´t let go that easily ?

I apologize for the long reply, but I really wanted to interact.

Absolutely – volume tends to be a function of share size. Look at SIRI or any number of popular stock that went to low prices.

That’s clearly occurring, but it’s happening at the expense of the DIA and probably other major ETFs.

I think it’s also a function of public awareness and strong risk-taking appetite and the desire to make a quick buck.

I gave your links a TinyURL so they should be working.

I’d look at it more from a Fibonacci retracement zone at 750 or so as I’d mentioned I think in a previous recent post, and that I think we’re less likely to break above 800.

We could head higher but we’ve had 4 up-days in a row and there’s a slight negative volume divergence.

We may swing down to form a B and then perhaps back up slightly to form a C and then back down to finish off the final 5th wave.

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