Trader’s Narrative

As I alluded to in the weekly sentiment review, the bears - or rather, the permabears - have been saying that this rally has been built on a shaky foundation because of the lack of volume.

This in spite of record shattering daily volumes during the deepest and darkest days of the sell-off. And in spite of the calendar being in the thick of the “summer doldrums”. And in spite of the total volume averages reaching unheard of extremes.

Here is the 15 day moving average of the NYSE total volume:

And here is the 15 day moving average of the Nasdaq total volume:

As you can clearly see, ever since 1999, we’ve followed a predictable script on Wall Street: the summer sees the lowest volume period of the year.

I’ve marked the month of August in yellow on the charts so you can compare what has happened previously on 8 previous occasions.