RSS
European Debt: An Elliott Wave Perspective

Volume Mirage: Biggest Rally Powered By Least Volume

September 22, 2009 at 9:36 pm | Trade Artist | Comments 0
Print This Post

A great post on the Trader’s Narrative blog regarding the volume behind bear market rallies. So far the current rally has been the biggest on the least amount of volume. Very interesting!

For a while now, we’ve been concerned that volume hasn’t been powering the market higher. In fact, if you think of volume as fuel for any sustainable market rally, then we’ve been running on fumes for a few months. Since I wrote that in early June the market wobbled a bit and traced a shallow correction but before long it was on to new highs for the year. This has been a teflon coated rally.

But there is no mistaking that what we are seeing is a true outlier in terms of historical market performance. Here is a chart from Hussman’s most recent commentary which shows the six-month percent change in the S&P 500 from the bottom of each bear market (going back to the early 1940’s) compared to the percent change in volume over that same period:

read more…

Filed Under: Market Overview

Tags: • •

RSSComments (0)

Trackback URL

Leave a Reply

If you want a picture to show with your comment, go get a Gravatar.

Subscribe without commenting

Disclaimer and Waiver of Claims: Trade Artist is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities customers should buy or sell for themselves. The analysts and employees or affiliates of Trade Artist may hold positions in the stocks or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities. Trade Artist, the authors, the publisher, and all affiliates of Trade Artist assume no responsibility or liability for your trading and investment results. Factual statements on the Trade Artist website, or in its publications, are made as of the date stated and are subject to change without notice.

Past results of any individual trader or trading system published by Trade Artist are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Trade Artist’s products (collectively, the “Information”) are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on the Trade Artist website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment. Securities and options involve risk and are not suitable for all investors.

See the characteristics and risks of standardized options.

Promotion and Endorsement Disclosure: In an effort to better serve readers of this blog, Trade Artist frequently requests and receives complimentary review copies of the courses, products, or services that you find on the Trade Artist website. That they are complimentary does not affect our review of the product - Trade Artist will always provide you with a direct assessment of a course, product or service that we review. In return for that endorsement and only in the case where you purchase directly though affiliate links on the Trade Artist website, we may be compensated by the producers of those products.