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Low Volume Pullback

Categories: Trading, Metrics

See: Liquidity.

The normal volume of whatever.com has been to trade 8 million shares a day. But as we roll into holiday season, daily volume shrinks dramatically to just 2 million shares traded per day. The stock price has been weak as well, down about 7% since the slow season started.

The notion is that buyers, being proactive, would-be share owners...set the price. And when the gaggle of those buyers fades away to the Bahamas, Hawaii, or Jackson Hole for winter vacation, the stock price sags, a sagging driven largely by the low volume of trades more than anything else, i.e. not a fundamental issue with the company selling fewer widgets of whatever.coms.

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volume and this is trading with okay yeah yeah you get the idea [Man shouting into megaphone]

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volume here is not about number 11 on the dial but rather about the number of [Person turning up volume dial]

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shares trading back and forth on a given day week hour a month and generally

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speaking higher levels of volume are a relatively bullish sign for the market [Water pouring]

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on all else being equal that is optimistic investors are putting money

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into the system buying up stocks and contributing liquidity like they are [Investor money transfer to stock market]

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seeking risk they're hopeful they're optimistic lots of volume high liquidity

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Inessa not just a california proposition 64 thing high volumes are attractive to [People protesting for cannabis]

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large institutional professional traders and investors because there remains the

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perception that if they want to sell a given position well then with high

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volumes they can get out quickly so they feel less hesitation about getting in

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quickly okay good just checking [Man shouting into megaphone]

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