Volume

There have been some comments about the low volume. There is a saying that volume is the fuel of a bull market, which makes sense intuitively. However, I have never been able to make any market trading decisions based on volume.

Volume has been of some help in individual stocks. When a stock is plunging on heavy volume and I want to try and pick a bottom, I look for a slowdown in the volume. A short term bottom usually comes shortly after the slowdown in volume.

1 comment:

Anonymous said...

For me I like to use volume compared to the shares outstanding.

If the stock goes down and I see that most of the float has been traded, I consider new hands own the stock, and it can go up.

But yeah, it doesn't help that much.

Also I like to see high volume when a stock goes down. I will try to buy the stock on that day with the high volume, because that indicates capitulation.

Vice versa for tops.

Anyways, when does the dollar carry trade end and when does the market reflect true earnings and true consumer buying power?

They say the weak dollar inflates profits of US companies who export and have sales overseas.

I thought the US was a borrower, purchasing nation and not an exporting nation. I don't understand.