Wanted: VOLUME (part 2)
Although the market has started to behave better, there is still one missing element: VOLUME. Typcially, volume confirms price, and when markets sell-off or rally on light volume, the moves are less trustworthy than a high volume action.
In the U.S. equity markets, volume has not kept pace with price, suggesting that recent strength may be more likely a technical rebound than a new bull run.
Our friend Mike Panzner looks at the recent volume trends in four markets:
Four of a Kind?
click for larger charts
Courtesy of Michael Panzner, Colins Stewart Securities
>
Here's a look at the recent index gains, and the differences in July and August 5 day movign average of volumes.
| Index (low) | Return | Volume Decrease |
Volume Differences (August v July) |
| DJIA (7/18) | +4.9% | -31.3% | 202.4 mil vs. 294.6 mil |
| S&P500 (7/18) | +4.7% | -21.7% | 1.19B vs. 1.52B |
| Nasdaq (7/18) | +5.2% | -17.2% | 1.11B vs. 1.34B |
| Russell 2000 (7/21) | +5.3% | -27.5% | 461 mil vs. 635.8 mil |
NOTE: The value for volume is the difference between the 5-day moving average on the initial date and the 5-day moving average yesterday, through 8/16/06.
Thursday, August 17, 2006 | 10:45 AM | Permalink
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Comments
I wonder how the volume this year compares to typical July/August differentials? It seems like August is always light. Bob Pisani would know!
Posted by: oldprof | Aug 17, 2006 11:35:26 AM
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