Trading volumes at 5 year low.

Discussion in 'Wall St. News' started by Grandluxe, Aug 22, 2012.

  1. Trading volume at 5-year low.
    By Hibah Yousuf @CNNMoneyInvest

    NEW YORK (CNNMoney) -- August is always a quiet month on Wall Street as traders escape to catch some rays during the final days of the summer, but this year's lull is more pronounced than usual.

    Trading volume hasn't been this low since September 2007, with a daily average of fewer than 3.3 billion shares exchanging hands so far this month. And trading volume is down more than 30%, compared with the average August over the past five years.

    Trading volume has been trending lower since the height of the financial crisis, creating a new dynamic that investors are still trying to adjust to.

    For starters, the market has virtually lost a generation of investors.

    "Individual investors don't want much to do with stocks," said Detrick, pointing out that money has been bleeding out of stock mutual funds.

    But even still, volumes aren't likely return to the financial crisis levels anytime soon.

    A majority of respondents to a recent Credit Suisse survey said it will take 2-5 years, or even longer, for volumes to recover. And nearly half said macro risks -- Europe's debt crisis, the U.S. fiscal cliff and deficit, and potential recessions -- need to be resolved before investors are willing to step back in with conviction. That's a tall order.

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    Trading volume has slumped to the lowest level since September 2007, with a daily average of fewer than 3.3 billion shares exchanging hands so far this month.
  2. This reminds me of Housing where everyone wants things back to "normal" without thinking 2003 to 2007 was an unsustainable blow-off.. It would be nice if that Volume chart showed 15 to 20 years data to put 2007 to 2010 in context.. The volume we have now MAY not be ridiculously light... could be "normal" and not a "slump" but merely a return to where it was before.
  3. Volumes were much lower 15-20 years ago.
  4. Have the spreads in general increased because of this decrease ?
  5. This doesn't bode well for the future of traders. Perhaps its time to hang up and look for greener pastures. :)
  6. ehsmama


    Actually it means -- old methodologies which stopped working will start to work again
  7. Move up the Time Frame ladder?
  8. Brokers, MM's , and HFT can eat each other for a while, The strongest will survive, the weak will vanish.
  9. Like? Range and volatility usually collapses when volume tanks, sure you could trade chop but its extremely risky and the payoff is not usually worth it. The other alternative to trading chop is to "buy and hold", but I don't consider that to be trading.
  10. low volatility leads to high volatility,

    high volatility leads to low volatility,

    price goes up, price goes down,

    volume goes up , volume goes down.

    I read somewhere that " there will always be a new high in volatility coming "
    #10     Aug 26, 2012