Thursday’s rally was accompanied by the lightest volume in 5 days. The relatively low volume could be worrisome for bulls. The importance of volume can be seen in the studies below. The first one looks at 2%+ SPX gains when volume comes in relatively high.

A week later ¾ of the instances closed higher and the average instance saw the SPX up about 0.9%. Those are some fairly bullish numbers. But Thursday did not post a 5-day high in volume. It posted a 5-day LOW. Below are the results under these conditions.

Numbers here are completely different. Now ¾ of the instances closed DOWN 5 days later – and by a substantial amount. This could be a warning sign that the bounce is not healthy.

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