Here is another chart that worth pondering: Why has this rally continued on faltering volume? Why isn’t there greaterinstitutional participation in this?

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12-11-09 Monthly DJIA w-volume-1

courtesy of Ron Greiss at The Chart Store:

Category: Markets, Technical Analysis

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

19 Responses to “Volume Falling As Rally Progresses”

  1. Greg0658 says:

    umm .. can’t you buy back the corp that way .. stop involvement .. not share …. beaver dams … what a system

  2. call me ahab says:

    awesome news-

    this was you can be one of the lucky ones taking the market higher-

    not those other loser’s who aren’t participating

  3. 10 cc says:

    Wall Street: “Where the hell are the damn bagholders? Alright, nudge it up one more week. They gotta’ bite soon right? Right?”

  4. the bohemian says:

    ahab- what you meant to say was-

    this WAY you can be one of the lucky ones taking the market higher-

    not those other loser’s who aren’t participating

  5. MayorQuimby says:

    Why? Because smart folks buy VALUE. There ‘aint no value in any equities anywhere NEAR these levels. Not only that but even if there were, I’d still want an additional discount due to all the game-playing, economic instability and prospect of another turn south once gvmt life-support is removed. Consequently, my buy-in point is below the March lows.

    OTOH – I wouldn’t short either with 0% leverage and every wealthy and powerful individual person on the planet trying to fight asset price declines. Best to sit this one out.

  6. the bohemian says:

    “Best to sit this one out.”

    no doubt- not the time to jump in feet first

  7. torrie-amos says:

    A. banks had too lever down, so alot of there hedgie customers no longer have 4-5 too 1 leverage and there own VAR is way way way down

    B. my guess is 80% of traders are no longer long term holders, in my little circle each his own is in and out this and that at times, and no one cares the market is up 60% from low and they missed 80% of it because they sold either in late 07 or early 08, so for these folks they are way way up for the decade, and since it’s how much you keep, none of them see any reason too worry about a run away bull market, could it happen oh yes, yet, they will take part in some of it and not get caught on the downside, these are employed people who do not see any uptick in there business’s

    C. institutions had too buy the low and since they are long term holders they have been the big winners

    D. 401k money still flows in, so we wiggle and walk giggle and talk, ohhh babee, mutual funds do have money too put too work

  8. SINGER says:

    of course volume is going to decline… the VIX went from 80 to 20 and the prices were very low in OCT to MAR on individual names so the share volume was much higher during that time…

  9. chancee says:

    It probably has something to do with this… Phil Davis said it best:

    What a great morning!

    Well, if you are a futures bull anyway. We keep telling you that’s where the action is. Last Thursday we gapped up 100, Friday another 50 and Monday another 50. Wow, what a market right? And where did we close a week ago Wednesday? 10,337. And where did we close yesterday after 200 points of futures gains? 10,452. So we LOST 80 points during real trading hours and gained 200 when no one was looking – yet no one is being arrested – go figure…

  10. bullish bear says:

    Bull markets like to go up with as few participants on board as possible they also like to climb a wall of worry and rise on the back of skepticism. The light volume tells me that worry, skepticism and the lack of participation is alive and well, a perfect combination. When volume starts to explode upward that tells me the end of this cyclical run is near as everyone including the general public (Joe six pack) is getting onboard and that the resumption of the secular bear market is soon at hand.

  11. patfla says:

    So what’s the market’s P/E ration again.

    search images.google.com:

    http://www.ritholtz.com/blog/wp-content/uploads/2009/08/20090821.gif

    With increasing frequency I end up right back at http://www.rithotz.com. Heh.

    I read recently (but haven’t been able to find again) a wonderfully simple (and with merit I think) scheme for long-term investing. Stay fully invested long ‘most of the time’. But when the market p/e ratio goes over 20, go largely to cash. And then when the market p/e sinks back to something close to 15, buy again.

    There are many ways this could be criticized, but for one, how many times, in just the last two yrs have we traveled beyond 20 and then back below 15? (maybe not that many?).

  12. catman says:

    My faith in humanity is somewhat restored by the bearish tone here – but – ya know this is a really weird distorted market as a result of the fact that some of our biggest corps/stocks are trading below the IBD’s tideline. Citi was a penny stock last year wasnt it? Other point is the Dow doesnt wag the world these days. Third point is all the hipsters are either trading forex or playing online poker. In spite of all that the average bull who had a little money last fall and a good set of cajones should be having a hell of a merry christmas. Next year will take care of itself. Hang loose.

  13. Robespierre says:

    The market is been driven up until Dr. Ben is confirmed. If there is a posibility of him not getting all the votes that will make it to the news and the IBs will crash it to bring everyone into submission just like they did during the TARP farce.

  14. Greg0658 says:

    curious on a TBP banner ad .. what do I find .. I guess a booyah is in order

    http://www.landolakesinc.com/utility/news/company/ECMP2-0108625.aspx
    (a Minnesota corp)
    Land O’Lakes officials announced that they successfully completed the final phase of the refinancing project announced in October.

    Land O’Lakes completed the redemption of all its secured and unsecured bonds as of Dec. 15, 2009. The $323.7 million of notes were redeemed at par, plus accrued interest. The company funded the redemption with the issuance of privately placed notes. The refinancing move results in a lower effective cost of debt for the company.

    As noted previously, the redemption of Land O’Lakes bonds effectively terminates the company’s obligation to file periodic reports with the Securities and Exchange Commission (SEC).

  15. ToNYC says:

    Goldman is HFT’ing with the PPT…like the huge currency swaps between sovereigns..there’s only to siphon the juice from the few investors still believing in MFs in their established 201Ks and ..they …are…getting….tired.

  16. nside says:

    I’ve read several times about the lack of volume sponsorship in the rally (Hussman’s newsletter, etc), however, from the looks of the chart the this rally’s volume is higher than the average volume from 2000 – 2007?

  17. JoWriter says:

    Could this lower volume simply be a return to the ‘normal’ levels of yesteryear? I agree with some of the more arcane reasons adduced above, but looking at the chart, it looks to me as if we are just about where we were about 5 years ago in volume.

    Kinda like our median home prices returning to their normal, pre-bubble levels, very, very gradually.

  18. Boots or Hearts says:

    Well, is it possible that the presence of ECN’s, off-exchange transactions, and “dark pools of liquidity” have the cumulative ability to diminish or undermine the current utility of volume as a technical indicator?

  19. Boots or Hearts says:

    nobody thinks so eh? That would seem to make sense as far as a 60% rally on diminishing volume since march from where I sit.