4 replies to this topic

[linrom1]

Sometime last year I had posted this chart with a comment that the market was in liquidation mode. The volume behavior in the highlighted box looked nothing like any previous bottoming pattern--it was behaving more like stocks that blow up and are going bankrupt. The volume just builds up and up. This is still the case. In fact, monthly volume in Feb 2009 on NYSE was the highest, ever. The volume just refuses to settle down like in past bear markets of 1929-1932, 1973-75 and 2000-2003. In all those markets, price began to quickly fall on diminishing volume. One possibility that I had entertained was that this market was behaving in opposite manner to 1929-1932, with most damage occurring at the tail end of the bear market. The bottom line is that this does not look like any bottoming pattern.

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[Super Bee]

Could it be that the rise in volume as price drops is driven by: (1) The absence of the "UpTick" Rule. ( short trading is promoted by this change hence additional volume ) (2) The presence of "Electronic Trading" which has become very popular and affordable to the average investor generating trades that would not have been made in the former time frame. What we are seeing may be the creation of the new standard for bottoming patterns in todays operating enviornment. SB

[linrom1]

What you are saying is possible, but what I am seeing is best illustrated by a stock such as Citi. This is picture perfect example of a stock in liquidation mode--note the building volume. This is never coming back: this is behavior I am seeing in the broad indexes.

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[Xenophon]

I think it may be that people are finally becoming aware of the severity of the situation now after seeing uncountable newscasts and written articles describing the situation for about the past about year and a half. In effect they don't believe the severity of the situation until they see their retirement accounts. Which may now be causing a response. Most people alive now in this country have never experienced times like these. As a corrallary in another post talking about the Kontratief Wave it was pointed out that the wave approximates the duration of a lifespan. So as the people die out who remember times like this we then almost immediately repeat the mistakes which occur at about 80 year intervals and give rise to Kontratief's wave IMO.

[typicalbear]

I think it may be that people are finally becoming aware of the severity of the situation now after seeing uncountable newscasts and written articles describing the situation for about the past about year and a half. In effect they don't believe the severity of the situation until they see their retirement accounts. Which may now be causing a response. Most people alive now in this country have never experienced times like these. As a corrallary in another post talking about the Kontratief Wave it was pointed out that the wave approximates the duration of a lifespan. So as the people die out who remember times like this we then almost immediately repeat the mistakes which occur at about 80 year intervals and give rise to Kontratief's wave IMO.

Ditto..I think you make valid points here. People will be experiencing deteriorating lifestyle conditions that they may have only read about and thought about as thoughts coming from those as being "old fashioned".