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MarketWatch.com – Low volume? Forgetaboutit!
Repeat after me: Low trading volume is nothing to worry about it. Of course, repeating this mantra doesn’t mean there’s nothing else to worry about. But, I can fairly confidently say: If the stock market does decline from here, it will have nothing to do with the recent low trading volume. That’s because volume tends to dry up every summer, like clockwork, and especially in August — when the greatest number of investors and traders take their vacations. So it is hardly a surprise, or particularly bearish, that it has done so this year as well. ( Read my July 10 column, “Should you sell a dull market short?” ) Yet memories are short on Wall Street. So, also like clockwork, traders in recent weeks have been taken by surprise by the low trading volume — and they think it’s a bearish omen.
Source: Bianco Research
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