One Reason a Break Above Resistance Has Such Low Volume

First, thinking about the last post, I just wonder if Thursday's accumulation was because of knowledge of the fact of Friday's F_E_D repo operation? It doesn't seem likely at that amount, the GS "Free Euro" buy advice seems more likely as part of a market cycle, but just something to think about.

I noted the lack of volume on the move above resistance yesterday, take a look.

 DIA since it broke above resistance and volume

 IWM intraday 60 min chart with today's break above resistance, not much volume.

 QQQ

And the SPY

I just read this, QQQ short interest is at the lowest since October of 2000, the SPY short interest is the lowest sinceOctober of 2007. There's no volume because there's no short squeeze, simply because there aren't any shorts.

Think back to our trend expectations, the next move a deep move down bringing shorts roaring back in to the market, followed by a bear trap, the shorts are squeezed and we see the resumption of the sub-intermediate trend we are in right now, except it hits a higher high and is more volatile, followed finally by the re-emergence of the Primary Bear trend.

Those assumptions were based on the charts, but if we think about it, Wall St. can't make much money if they don't have retail to trade against, since there aren't any shorts to squeeze here the next logical move (FORGET THE CHARTS) is the exact move down we have expected to come next, it has to be strong enough to really get the shorts excited. Then and only then can we see a huge short squeeze move higher as we expected in our future trend assumptions (assuming there's no Central bank intervention which changes everything).

I thought that was very interesting as it is in line with the charts that gave rise to our trend assumptions.