We’re interested in the large pickup in traded volume over the past few weeks in the Dow Jones Index. By any measure the volume is abnormal, even compared to prior end of year volume traded.
The conclusion we draw from this is: whilst ETF’s are helping to accelerate index volumes, it seems a reasonable conclusion that it could be part of a series of indicators which are helping to suggest that we’re near an exhaustion point in the US equity rally. We’ve seen market tops coincide with big volume distribution patterns like this before.
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Chart – Dow Jones
Martin says:
Big volume at a market high signalling exhaustion does not make sense. Surely only the dummies (low volume) would by at extreme highs. High volume suggests the uptrend is still strong ?!
What am I missing ?
Martin