Navigating Breakouts and Volume

July 29, 2025

Navigating Breakouts and Volume

Trading Strategies with Bob Iaccino

*Bob Iaccino, Chief Market Strategist and Co-Founder of Path Trading Partners, joins us live every Thursday from 11am ET, as our risk management educator. With 30 years' experience working as an active investor in equities, commodities, futures and FX there are few better to talk on the subject of risk management.

Bob has developed a method for breaking down his key fundamentals of risk management, in a way that he thinks retail traders can understand and use to get actionable insights to bring into their own trading. Below are some excerpts of Bob’s thoughts from a recent live session. If you’d like to save your seat to watch and participate in the next session, register here.

Breakouts and Volume: What Informed Traders Pay Attention To

The recent market rally has generated considerable excitement, pushing through key technical levels with eye-catching ease. But as traders, it’s essential to cut through the noise and assess what this price action could really indicate. Although a breakout may suggest potential, volume often serves as a subtle yet critical indicator that either supports or challenges the sustainability of the move.

Volume acts as a reality check. While the market recently gapped through a significant resistance level the volume remained notably muted. Typically, robust breakouts are accompanied by a surge in trading activity, as new institutional and retail participation signals stronger conviction.

Without that volume, a breakout can be fragile. Low-volume moves may be prone to reversals, lacking the broader market support needed to sustain momentum. Traders may want to watch closely in the coming days - any continued move higher could be more compelling if accompanied by a meaningful pickup in volume.

Why I Don’t Trade Volume

To be clear: I don’t use volume as a direct trigger for trades. I use it more to read overall market posture. Take crude oil as a recent example. I entered a short trade not because of volume, but because price action and market structure aligned. My approach involved drawing a trendline inside the rotation zone, waiting for a close below it, and executing the trade with clearly defined risk. Even when fundamentals (like OPEC cutting production forecasts) didn’t favor the short case, the technical setup held - and the trade played out. That highlights the consistency of applying a technical discipline.

Let’s Talk Fundamentals

At first glance, market sentiment appears optimistic: progress in China trade discussions, a new deal with the UK, and some signs of geopolitical easing. But this isn’t 2020 anymore. Market follow-through is more important than headlines.

Consider 2018: China pledged to purchase substantial volumes of U.S. soybeans. It made headlines, but much of it never materialized. Fast forward to today - we’re within 5% of all-time highs, even as tariff hikes are active and inflation remains persistent. That’s a disconnect worth noting.

I recently reviewed financials for a company that imports roughly 60% of its product components. With average tariffs nearing 28%, that translates into a potential 18–20% rise in retail pricing. That’s not just theoretical inflation - it’s a direct cost impact. Yet markets continue to trend higher, seemingly unfazed.

Inflation: A One-Way Trajectory?

I pulled CPI and PCE data from the St. Louis Fed, and one thing became clear: consumer prices don’t typically decline. They may flatline or rise, but outside of recessions, they rarely retreat. So when we hear that “inflation is cooling,” it often means prices are rising more slowly - not decreasing. The base level remains elevated. That nuance is essential when assessing the outlook for equity markets.

Final Thoughts

While short-term technical indicators suggest the potential for bullish momentum, confirming signals - like volume strength and fundamental alignment - can help in evaluating the durability of these moves. As always, stay analytical, question prevailing narratives, and approach the market with disciplined vigilance.

Disclaimer

This content (the “Content”) is produced by Bob Iaccino. The Content represents the views and opinions of Mr. Iaccino. Bob Iaccino is compensated by TradeZero for participating in Live Sessions and for broadcasting, displaying, and/or presenting marketing and sponsorship materials that promote TradeZero. Mr. Iaccino’s trading experiences and accomplishments are unique, and your trading results may vary substantially from his. TradeZero is not responsible for and neither affirms nor endorses any of Mr. Iaccino’s views or opinions expressed in the Content. TradeZero makes no representations or warranties with respect to the accuracy of the Content or information available through any referenced or linked third party sites. The Content has been made available for informational and educational purposes only and should not be considered trading or investment advice or a recommendation as to any security.

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