For the stock market to go down on good volume, someone must be buying. If no one at all is buying, then the volume is low, because the price goes down due to no one responding to the lower prices by buying. So, who buys the huge volume of stocks that are traded on big volume down days ??
Those that expect the market to rally. When they expect the market to rally? It depends. I expect to sell tomorrow for a profit. Hedge funds might expect to sell some 2 or 3 months on. Mutual funds might expect the market to be higher than now some 6 months on. Don't think institutional investors are clueless because they are buying now. They just have longer time frames because of the massive amounts of $s they manage.
This is how the media depiction of the Stock Market is untrue (including CNBC). A day like today is depicted as "the stock market traders are selling today". In reality, for every billion dollars of selling, there must be a billion dollars of buying. Time to panic is when the market drops on LOW volume - meaning that no one wants to buy stocks. PS Record number of NASDAQ stocks purchased today.
I bought, and then sold. Honestly, I was afraid to anything good overnight, for fear it would drop. I'm not really a day trader, but who else is afraid of overnight?
This is almost right... except that its completely wrong. I would go back and study volume/price theory a bit.
Wait a minute.. actually you are right. Today was pretty bullish since there was large volume and it was down that means a lot of people were buying. My mistake. Carry on.