Is the rally over? All four of the major indexes I’m currently tracking with my GMT (General Market Trend) indicator closed down on Friday. These markets have fallen on lower volume than they've experienced over this multi-week rally.

Is that fall-off of volume during a price pullback some sort of signal?

Although the rally has resulted in green boxes on the daily GMT for all four tracked indexes, for both the Micro and the Short-term trends, the weekly GMT has not been convinced. It’s remained bearish throughout this multi-week rally. So, what does that mean? Is the rally dying?

Perhaps, perhaps not. One thing seems certain: there’s a lack of buying interest at these price levels to sustain the rally. Buyers are nervous. The Dow-30, Nasdaq-100, S&P-500, and Russell-3000 are all in the vicinity of their recent February highs. In uncertain times, buyers see that and flinch. Those highs are likely going to act as resistance to this rally. If price does manage to push through this band of resistance, the rally may resume. If not, the markets may turn downward again – seeking support.

In the above chart, the weekly chart of the NASDAQ-100, note how the GMT lines plotted in the bottom window are all still tracking downward. The recent multi-week rally has not proven enough to change the score on the weekly charts.

In 1937, almost eight years after the famed market crash of 1929, the Dow crested at a new post-crash high. The Dow had managed a relatively steady climb over a two-year period (1935-to-1936), and investors had become optimistic that the recovery was well underway. They felt the bear market had ended and they were growing confident in the market’s continued growth.

The Dow’s crest, in 1937, proved disastrous for many investors. The Dow proceeded to loose 46% over the next seven months. History books refer to that episode as the crash of 1937. More investors lost their fortunes during this second crash than were lost in the initial crash of 1929.

Speculation is for speculators . . .

Sometimes I think trading the market is more thrilling than riding California Screaming, that incredible roller coaster in Disney’s California Adventure theme park. With every up and down, with every twist and turn in the market, it’s a new ride. Sure, we have history to inform our educated guessing; however, we still remain limited by our emotional reaction to the market’s gyrations.

I’m looking forward to Monday’s open.  Hopefully, we'll get a read on what may lay ahead.

If you missed my last article on how I define the GMT indicator (General Market Trend indicator), you can catch it here.

Meanwhile, stay tuned. There will be more installments to this series.