NYSE Composite

The equity rally, setup and driven by the brute force of money flows, created some shock and awe yesterday. A closer inspection of the tape, however, revealed weakness. The 2/4 NYSE breakdown gap was filled on -25% contraction of total exchange volume. This large contraction in exchange volume warns of weakening upside force. What cannot break resistance with force, will eventually reverse and attempt to break support with force. This is only something to watch for nominal (U.S. dollar focused) investors/traders.

Generally, the above is nothing more than noise within a dominant negative REAL trend. The Weimar Republic history lesson reminds us that stocks can trade higher despite dire economic conditions. That is why real, not nominal, prices must be the yardstick of the true trend.

NYSE Composite Index with NYSE Volume: