Nasdaq Volume Decreasing

Monday, March 20, 2006 | 06:15 PM

Barron's Michael Kahn points out that Weak Trading Volume is Troubling for Stocks:

"In the stock market, fuel is trading volume. Without volume, a price advance will soon slow down, if not stop and reverse. Momentum may keep trends going for a while, but sooner or later the market is going to require buyers to put real money where their collective mouths are and buy a lot of shares.

Chart watchers call this a bearish divergence as prices rise while indicators, volume in this case, fall and typically it is price action that adjusts.

The market has reached new highs but has done so on less activity. It is a warning sign that something is not quite right with the rally, but it does not constitute a sell signal on its own. Still, the fact that the public is not buying like crazy, despite what the pundits are saying, is worth knowing.

As most people know, Wall Street is ripe with colorful sayings and one that comes from the technical side is "In price, there is knowledge." It is another way to say that all information is in price action."



Weak Trading Volume Troubling for Stocks
Barron's Wednesday, March 15, 2006

Monday, March 20, 2006 | 06:15 PM | Permalink | Comments (9) | TrackBack (0) add to | digg digg this! | technorati add to technorati | email email this post



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How does seasonality figure into this? Does the second to third week of March typically slow down?

What is the impact from "Spring Break"? (if any)

Posted by: nate | Mar 20, 2006 6:32:26 PM

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