There are two volume patterns that intrigue me.
The first one is strong trading volume following a decline. It implies accumulation. The bottom is reliable if volume is particularly strong/above average.
The second pattern is when volume is strong following a sharp rally. The meaning is distribution. As the crowd jumps in the strong hands sell to the newcomers. A top or a period of consolidation (at best) is near.
These two patterns are shown in the above chart (click on graph to enlarge).
To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs. I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes. George Dagnino, PhD
Editor, since 1977
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