I know this stuff doesn't mean anything until it does, but did anybody happen to notice that the market's climb over the past 5 days has been on declining volume?

Figure 1 is a daily chart of the S&P Depository Receipts (symbol: SPY) with volume bars in the lower panel. The red and gold dots over the price bars are key pivot levels or the best areas of support (buying) and resistance (selling). Looking to the volume bars, we note a spike in volume on a gap down day (at point #1). Over the next 5 days, the market climbed back to resistance levels, but it was on declining volume. Coupled this with the fact that investors have begun to see the market as bulletproof (Rydex asset data; see Daily Sentiment Report), it is clear from this perspective that the best gains from this rally are behind us. We are playing for scraps.

Figure 1. SPY/ daily

Larger Image

Old school stuff -- volume, support and resistance -- are still important, but it is often overlooked by those who trade and invest on emotion.