I have read a few good articles on the internet about the contracting volume throughout this rally. One specifically is from Hussman Funds. This is the chart from the article: This rally looks very much like the bear market rallies of the past. What is your opinion? Here is the link to the article by Hussman Funds: http://www.hussmanfunds.com/rsi/rallyvolume.htm
1) The "contracting" volume can have to do a seasonal tendency for volume to diminish during the Summer months. 2) Do those charts properly account for all derivatives-related trading? 3) The market appears to be doing a good job of climbing a "wall of worry". As it grinds higher, bearishness is increasing. Isn't that supposed to be "bullish"? 4) Be patient until September and October when people will then talk about how those two months are the most bearish for the market.