Tag Archives: Trading Volume

Not out of the woods yet (Part II of II)

Continued from part I. At the time of writing the S&P is now up 33% from its March 9th lows and essentially even year to date, up 0.56%.


We are nowhere near the end of housing foreclosures. Mortgage rate resets, which are tied closely to foreclosure rates, are set up to spike mid-way through 2010 and peak in July 2011 at a higher point than we saw in 2008. Notice from the chart how we are currently in a valley or in the ‘eye of the storm’ as some people have said in term of rate resets. Not much is being done to address this problem of coming foreclosures. Residential real estate should continue to be a drag on bank earnings. See chart below.

Mortgage Resets

Trading Volume

While I am no expert in technical analysis trading volume seems to point toward this not being the start of a bull market. William Hester, at Hussman Funds, shows that historically trading volume during the first five weeks of a new bull   is significantly higher than the preceding 5 weeks. Trading volume during the current 5 week rally is actually down about 10% from the preceding 5 week level. See charts here.