Comments on: WHERE’S THE VOLUME?

By: John

John — Tue, 02 Mar 2010 03:24:49 +0000

If you look at volume on the U.S. market at significant bear market lows be it 1932, 1942, 1949, 1974, 1982, 1987, or 2002 you will see an increase in average daily volume on the subsequent advance. Not necessarily at the very beginning of the turn but it does kick in as the rally progresses and it certainly doesn’t take a year to do so. Average daily volume on the current advance from the March 2009 lows is actually declining, at least as I read it from the Investors Daily Chart. Maybe ‘this time is different’ or this is the ‘wall or worry’ but I continue to find this as a concern.

By: jt26

jt26 — Tue, 02 Mar 2010 00:00:06 +0000

The article mentions options (also other private derivatives, insurance company’s embeeded options/forwards in their guranteed products, contracts for difference etc.) … seems to make sense … if the net long or short change is not +/-100% then only a small fraction would need to be hedged in real markets. One could thus conclude that all the action is in derivatives and the real markets are only used to settle net hedging or net of collateral. If this is true, sounds like a market ripe for manipulation, or a dangerous instability.

Thinking of collateral, I wonder if that is also what those magical “banking reserves” are being used for. If there is an implicit lean on those monies, one can blow the money multiplier theory to hell.

By: shrek

shrek — Mon, 01 Mar 2010 22:53:15 +0000

Volume has ledt because the goverment is engaged in the most massie economic intervention in the history of the world.
Where is the rule that the world can keep on doubling its debt every ten years to fund economic growth? Thats what we the morons running the fed are trying to achieve.

By: eajkeajk

eajkeajk — Mon, 01 Mar 2010 22:22:17 +0000

Well as far as I know, the volume is the number of shares in the US (isn’t it?) and it is not very representative. Should 1Mio share @ 1$ have the same weight than 1 share @ 1Mio $? In France the volume is in EUR and you can divide it by the close price to have an idea of the market activity. I find logical that the activity rises in bear market. If most of the positions are long and if you don’t like to lose money, you’ll want to leave a losing position faster.

Let’s hope that you can see what I mean with the following link:
http://img442.imageshack.us/img442/3739/clipboard1.gif

By: tradeking13

tradeking13 — Mon, 01 Mar 2010 22:04:44 +0000

Where has all the volume gone?

Dark pools.

By: John

John — Mon, 01 Mar 2010 21:12:26 +0000

I can’t speak for what they do in France but here in the U.S., which is the market I participate in, it would be a little more encouraging to see volume expand as the market continues to advance. I find that increasing volume adds validity.

By: eajkeajk

eajkeajk — Mon, 01 Mar 2010 20:21:38 +0000

I’m quite amused that people would like to have volume along with a rise of the market. If you make a chart with volume/close of the french CAC40 (volume are in EUR on the CAC40) and compare it to a chart with close only (sorry I don’t know how to post an image), you will find that volume/close has an inverse correlation to close 90% of the time. During the 2003-2007 bull market, it was much lower than now. During the 2008 crash it increased a lot (probably because during a panic you want to sell fast). During the 2009 recovery, it decreased. And today, it … I let you draw the chart yourself.