NEW YORK (TheStreet) -- The stock indexes had a very constructive down day on Tuesday. Even though all the indexes closed in the red, the S&P 500 Trust Series (SPY) volume came in at just over 72.6 million shares. This was actually lower volume than Monday, an up day. As you know, stocks have been lower on accelerating volume. The fact that Tuesday volume was lower on decelerating volume versus Monday, an up day, is bullish on the margin.
The DJIA closed down 9.44 points at 16560.54 while the S&P 500 was lower by 3.17 to finish at 1933.75. The Nasdaq was down 12.08 at 4389.25 and the Russell 2000 closed off 8.89 at 1133.03. The Russell 200 was lower by over 1% earlier in the day.
So, all in all, a constructive down day in the markets.As I wrote in Monday's article, I am of the opinion that we were witnessing a relief rally last Friday and Monday from a deep oversold condition in the stock indexes. Tuesday's down day confirmed that opinion. With the down day on Tuesday, the markets can now resume their upside movement. But make no mistake, it is not clear sailing ahead. The DJIA, the S&P 500 and the Russell 2000 are still in trend bearish territory, according to my algorithm process. I will not get bullish until my indicators give me the signal. Front running an anticipated event has been a recipe for failure if you are a trader in this stock market. What the rest of the week looks like is anyone's guess. I am staying cautious and trading only those stocks that provide me with an extraordinarily oversold signal. At the present time, there are not many stocks that provide me with that extraordinarily oversold signal. Hence, that is an indicator of a stock market with no clear cut direction, up or down. So staying patient is the proper course of action. Read More: Why Shorting Tesla Is Not a Smart Plan for Now On Tuesday, the only trades that I made were adding to my long positions in Mylan (MYL) and Live Nation Entertainment (LYV). At the time of publication, the author was long MYL, LYV, INTC and KO, although positions may change at any time. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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