Weak Volume Depict Warning Despite Gain in Wall Street

On Monday, there was a rise in the stocks as new developments have been taking place in order to downsize the debt of Greece, which has attracted buyers and caused the S&P 500 to touch a key support level. However, the volume, which depicts the recent weakness, might not be over.

Earlier, stocks removed the early losses when Standard & Poor’s 500 went down to 1,259.78, S&P’s moving average of 200 days, which is often seen as a critical point in determining the direction of the market. A fall below the level has been the first since 2010’s September.

According to Asbury Research’s director of research, John Kosar, the bottom was when the market was in the midst of a bullish trend since last year’s July. Kosar added that he thought people would be looking for places to purchase dips and that quite simply put, it was a place where buying was expected to come into the market. Asbury Research is based in Chicago.

The thin volume may have exaggerated the moves slightly. Compared to the daily average of 7.58 billion, an estimated 5.66 billion shares had been traded on the New York Nasdaq and NYSE Amex exchanges.

The finance ministers of the euro zone nations have given Greece two weeks starting from Monday in order to approve the austerity package, which is a condition for the emergency loans of an estimated 12 billion euros. Consequently, the condition has put a lot of pressure on Athens where the austerity package is very unpopular.

The euro zone finance ministers expect the money for Greece’s bailout to be paid by mid-July. The next tranche Greece’s bailout is estimated at 110 billion Euros and will be paid by the International Monetary Fund and European Union.

A climb of 76.02 or 0.63 percent to end at 12,080.38 was seen on the Dow Jones industrial average (.DJI). On the other hand, a gain of 13.18 points to 2,629.66 at close or 0.50 percent was seen on the Nasdaq Composite Index (.IXIC).

The CBOE Volatility Index also known as the VIX (.VIX) has lost nearly 8.5 percent, which is the biggest fall in percentage since March 21.

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