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I like Low Volume



May 28, 2014 – Comments (3) | RELATED TICKERS: LOW

For years I kept reading and hearing that this secular bull market is unsustainable since the volume is low.  Well for years now we kept seeing this market rise and rise on light volume.  Even this month pundits bemoan the low volume and yet the market keeps making all time highs. 

I submit this is a good thing.  I really don't want high volume pushing the market higher.  I did want high volume back in March 2009 but that was after a totally oversold situation.  While I wouldn't say this market is in overbought territory, but a rush in high volume making higher highs now would worry me. That could actually mean a top.

Low volume to me means people are holding for the most part all while there is plenty of money still on the sidelines.  I'd rather see it trickle in than rush in. 

3 Comments – Post Your Own

#1) On May 28, 2014 at 10:59 PM, valuemoney (< 20) wrote:

I agree. High volume tends to mark troughs and peaks. High volume on an up day with any stock usually means a gap up and gaps tend to get filled. Cus if everyone buys it at once later everyone owns it and nobody is left with money to buy it at a higher price.

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#2) On May 29, 2014 at 12:30 PM, constructive (99.97) wrote:

I like high volatility. Low volatility is boring.

I can handle my stocks only going up or down 0.5% a day (without unnecessary trading out of boredom). But I could also handle them going up or down 4%, which would offer more opportunities.

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#3) On May 29, 2014 at 2:02 PM, awallejr (28.17) wrote:

Well I have an iron stomach regarding volatility, having survived the crazy swings in 08/09. 

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