This morning, I want to take a quick look at our NASDAQ to NYSE Volume Indicator. This great indicator, which adjusts the volume to take out the secular changes that are always going on, continues to show a very, very bullish picture. Still in my mind, I am equating this to similar conditions in 2004.
I wouldn't bet the house on my historical comparison, however, but in 2004 as the Fed was about to start their "tapering" off of extreme monetary liquidity, we did get a similar signal. The actual bottom to that decline was in August of that year, but this indicator signaled in April of the upcoming bullish advance.
Our message is that this has some short-term ramifications, but it's also a very important long-term bullish signal. It means that bull-killing speculation, when the Fed will be trying to take the punch bowl away, is absolutely dead in the water...and that is very good.
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