Currently there are 5788 components in my Worden “Common Stock” watch list. I run a simple scan on this daily to check the number of stocks up 4% with volume that must be higher than yesterdays and above 100K. 158 met this requirement today. Given that the NASDAQ was up 1.8% this number is very anemic. Further, of these 158 only 8 had dollar volume greater than 100 million.
Looking at the current leg of the rally that started from the 12/19/11 pivot, volatility as expressed by market closes of 1% or greater magnitude has been increasing in frequency over a much shorter time frame since the peak close on 03/26. Trends tend to have their greatest instability in the beginning of a move and at the end.
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| Volatility Over Time Comparison |
I'm still of the mindset that there is more room to the downside and anticipate a correction on the NASDAQ of 7-10% overall. Should this scenario play out I'll then focus on the signs to dip toes back into the water.
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