Volume, Volume, Where Are You?

NEW YORK (TheStreet) -- The market selloff that I have been looking for finally made itself present on Tuesday. After the futures were up early on Tuesday morning, the stock market opened to the downside and continued to trade lower during the day.

The DJIA closed down 129.53 points to 16401. The S&P 500 closed down 16.94 at 1867.72. The big loser on Tuesday was the Nasdaq, down 57.30 points at 4080.75. The Russell 2000 closed down 18.29 points at 1108.

The volume today was pathetic. This has been a very concerning and important issue for me. I will call your attention to an extremely important fact. The volume on Monday was down 26% vs. the one-month average, and down 40% vs. the 3 month average. Tuesday's volume was no better. The volume was less than Monday's volume in the S&P 500 Trust Series ETF (SPY).

What is going on? Where is all the volume? I presented a live screen show in my chat room Tuesday that showed the weekly price action vs. the internal volume trend of the four major indexes. What was quite noticeable was the difference between the Nasdaq and Russell 2000 index vs. the DJIA and the S&P 500. The Nasdaq and Russell 2000 have been in a Trend Bearish environment since the week ending Feb. 14. That has been supported by the volume trend.

The DJIA and the S&P 500 have been in a Trend Bullish environment that has not been supported by the volume trend. That is a negative, bearish divergence from a trend standpoint, a three-month or longer time frame.

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