Light Volume Rally – Use Caution

The market rally feels nice, but we are likely to see profit taking

PRE-OPEN MARKET COMMENTS MONDAY – The market has recovered more than half of its loss for the year and the price action the last few weeks has been encouraging. The duration and magnitude of the bounce has been excellent and the market has been able to move through major resistance levels. The move has come on very light volume and that is a sign that the buying conviction is not where we would like to see it and that we should expect dips. The good news is that this rally does solidify support at the low of the year and that price is likely to hold.

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