QQQ's 5th High On Low Volume

It seems at the moment as though we've entered another phase of the Nihilism Rally.

Almost everything we've looked at in recent weeks has suggested a pause at best, and yet we continue to reach new highs. Nothing matters. At least not the "somethings" that we monitor.

At the risk of adding yet another match to the studies that are going up in flames, the Nasdaq 100 trust (QQQ) is doing something unusual today. It's on track for its 5th-straight high on abnormally low volume. Each of the new highs has come on volume that is at least 25% below its average for the past year.

The table below shows how QQQ performed following its precedents. Returns were weak, no surprise there, with really only one occurrence where it managed to rally almost uninterrupted going forward, in 2010.

We always focus on the risk versus reward, and over the medium-term, it was skewed heavily to the downside. We can see that the maximum risk tended to outweigh the maximum reward on average and for almost all of the occurrences, especially over the next month.

I hate to say "for what it's worth", but for what it's worth, this is another negative for the prospects of sustaining this breakout.