Importance of low volume

I cannot believe how confusing the environment is. Despite several bad news the market stayed afloat, budging just 1%. But that happened in a light volume. The market needs high volume to go up. It does not need high volume to go down - just disappearance of buyers is sufficient to make it go down. Technically, if a market has been going down for a while and you get a big volume down day, that is significant - that's the exhaustion and market will most likely turn around next day which you have to confirm before placing any bets on the long side. The situation now is just the opposite. The market has been going up for a while. You need low volume down or up days - that's significant and may mean we might see some more down days. It may be that there are fewer committed bulls and they are hesitant. At the same time bears have gone in hibernation - this time too scared to come out and play against the Fed.

The low in this market near 800 is supported by the Fed buying treasury. Fed is manipulating the yield curve which helps banks with their balance sheet which helps keep the SP500 afloat. That is the game right now. So, when will this game end? I don't think it ends anytime soon. So, I believe that playing the long side will be profitable in the near and mid term. Buying on pull backs to the uptrend line will work. That would be around 840 on SP500. But a big political question is: how important is the health care to Obama people? The game of keeping the market afloat will end when Fed wants it to end. Fed will end it if Obama people put pressure on them. I continue to believe that the second stimulus package will be about health care - thats how Obama will get money for the health care reform. Need one more scary story and all campaign promises would be fulfilled. Obama does not need to be a 2 term president. He would have done all he came to do in 1 term alone. Education reform, health care reform, defense department reform, and foreign policy reform. He can retire early. Of course, he wants to be 2 term, but even if he does not get reelected, it would not be any loss in terms of his contribution to the evolution of USA. He has to assume that he has only 1 term to achieve whatever he wants from this job. It would be foolish for him to put off anything on his agenda since most likely he will not be re-elected, current poll numbers not withstanding.