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A Low Volume Bull
MONDAY, AUGUST 27, 2012 AT 09:24AM
Ever since the current bull market began in early 2009, the most oft-cited criticism is that volume has been weak. Even the most causal of market observers has heard the complaint that rallies on light volume are unsustainable and in effect, don’t count. The argument sounds good in theory, but followers of this logic would have essentially missed out on what is now the ninth strongest and longest bull market (and more) in the history of the S&P 500.
In order to illustrate the fallacy of this argument, the chart below shows the performance of the S&P 500 since the bull market began on March 9th,2009 along with its performance if we took out all days where volume (as measured in SPY) was below the 50-day moving average. So far this bull market, the S&P 500 is up 108.5% (blue line). If you back out all days (up and down) over the same period where volume was below average, you come out with a decline of 30.1%. Bears can argue whatever they want, but if you followed the low volume argument, you would be down 30.1% instead of up 108.5%!
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狗仔卡
发表于 2012-8-27 08:48 AM
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变色卡
发表于 2012-8-27 09:32 AM
