Online Stock Trading | Lack of Volume Has Many Questioning This Rally

Lack of Volume Has Many Questioning This Rally


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Once again volume came in lower than its 50dma across the board. Even as oil receded the Institutional Buyers stayed away. They were not quick to jump on the stock bandwagon just yet. Big Institutional Buyers have simply stayed on the sidelines as ever Tom, Dick, and Harry try to play this market. Until we see any type of action from this players its tough to pin down market direction. However, at this point we do have volume on up days higher than on down days. Regardless of how much volume, it is still pointing to higher prices in stocks.

I still see folks over at Real Money.com bearish on this market. Most are simply saying that with the lack of volume we can not have much more upside left. However, the same can be send to the downside. If volume really isn’t here on either side, the direction remains flat. “Never short a dull market.” Why? Because volume hasn’t indicated where we are headed.

I am not ultra-bullish here, but I am definitely not bearish at all. I still believe a healthy level of cash 25-50% is the right amount to have in this environment. You need to have capital to deploy to sound growth stocks that are breaking out on above average volume.

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One Response to “Lack of Volume Has Many Questioning This Rally”

  1. Lack of Volume Has Many Questioning This Rally | Investors Paradise on May 13th, 2008 12:10 pm

    [...] Once again volume came in lower than its 50dma across the board. Even as oil receded the Institutional Buyers stayed away. They were not quick to jump on the stock bandwagon just yet. Big Institutional Buyers have simply stayed on the sidelines as ever Tom, Dick, and Harry try to play this market. Until we see any type of action from this players its tough to pin down market direction. However, at this point we do have volume on up days higher than on down days. Regardless of how much … [visit site to read more] [...]

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