Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
WSJ has a chart up showing volume on the NYSE. In “olden times” one would want price confirmed by an uptick in volume but certainly that has been the complete opposite way to invest over the past 5 years. The worse the volume it seems the better the price action. Perhaps that is because crisis after crisis has brought in tremendous volume but I am sure there are a host of other reasons as well. Note this summer’s “crisis” did not bring in the type of volume that was seen in summer 2011 or summer 2010.
We can now see volumes have tapered off to levels last seen in late 2007. Recall the first hints of the financial crisis hit in August 2007 with subprime so we’ve come full circle in a way. Specific to August it almost has a holiday (Christmas/Thanksgiving) feel to it – very low volumes even relative to what we have been use to.
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