Monday, June 22, 2009

Stock Market Volume

US Stock Market Low Volume Argument Might be a Bad One

I'm as bearish as a number of other people in the US stock market however one of all the arguments for 'this is a bear market rally' I'm not sure the 'low volume in the rally' is a good one, the market just came from a period where everybody thought things were going to $0, the market was trading in a economic depression type enviroment so it was expected that volume would shoot at absurd levels. As the depression is priced off the market is natural that volume would decrease, there's nothing unhealthy about this, its only unhealhy if you are looking at volume moving averages that are still capturing the Lehman crisis Sep08-Mar09 volume levels

Its almost impossible to beat that kind of volume without another massive failure so some bears are creating an strawman in order to support their cases. The current volume levels is still right in line with the pre-lehman 2008 levels so it could be a more neutralish technical point than some realize

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