While overall volume rose on Thursday, the Quantifiable Edges Volume Spyx indicator once again dropped precipitously. It came in at -12, which is an incredibly low number. I looked back at other times the S&P 500 volume Spyx indicator dropped this low. Going back to 1995, there were only 4 readings of -10 or lower. They occurred on 6/10/04, 4/28/08, 5/30/08, and 11/3/08. In every instance the market was trading lower 2 days later. The average drop for the 2 days was over 1%.

Loosening the requirements to look at instances with a close below 0 produced the following results:

As you’d expect we see bearish tendencies here. As I‘ve discussed in the past the volume Spyx can be especially effective when you also take the day’s direction into account. Low readings on up days tend to be especially bearish while high readings on down days tend to be especially bullish when looking out over the next few days. Below you can see the results following readings below 0 when the market also closed up on the day.