Is Tape The True Thing?

It is for Turnaround Tuesday and that’s about all you need say.

What was the reason for the rally Tuesday?

Not very much beyond a rally in oil prices. The reason for that was fires in Canada and temporary weaker production in Nigeria. Both of these events are temporary but a heavy overhang in production weighs on future prices.

As markets were weak the previous two weeks it was the perfect time for a short squeeze and we’ve seen this numerous times over the past many months. There were also some supposed bullish comments from the IMF and (yes, them again) Greece as the Germans caved for another rescue.

But, another true thing is there was little volume in trade Tuesday, and this means little participation which to me is a negative.

Below is the heat map from Finviz reflecting those ETF market sectors moving higher (green) and falling (red). Dependent on the day (green) may mean leveraged inverse or leveraged short (red).

Volume incredibly weak and breadth per the WSJ was positive.

Chart Of The Day

A light volume short squeeze may be designed to suck new investors in to markets. There’s nothing new in that.

Other than oil there wasn’t much in the way of positive news to pump markets higher.

But the bottom line as always is the reality of the taped vs my (or anyone else’s opinion) opinion no matter how intelligent it may sound.

Let’s see what happens.