Barron’s Michael Kahn points out that Weak Trading Volume is Troubling for Stocks:
"In the stock market, fuel is trading volume. Without volume, a price advance
will soon slow down, if not stop and reverse. Momentum may keep trends going for
a while, but sooner or later the market is going to require buyers to put real
money where their collective mouths are and buy a lot of shares.
Chart watchers call this a bearish divergence as prices rise
while indicators, volume in this case, fall and typically it is price action
The market has reached new highs but has done so on less
activity. It is a warning sign that something is not quite right with the rally,
but it does not constitute a sell signal on its own. Still, the fact that the
public is not buying like crazy, despite what the pundits are saying, is worth
As most people know, Wall Street is ripe with colorful sayings
and one that comes from the technical side is "In price, there is knowledge." It
is another way to say that all information is in price action."
Weak Trading Volume Troubling for Stocks
Barron’s Wednesday, March 15, 2006 http://online.barrons.com/article/SB114243868226998965.html