>> The reality is volume has been drying up.
Michael,
I checked the 10 year chart of NASDAQ on bigcharts.com. The volume now is double the volume of '98 (with the composite at approx the same price level - 2000). So if we assume that day-trading is currently not profitable enough to justify the time and effort, my guess is volume will drop further.
Quite likely, if we remove program-trading volume, real-people volume is about the level of '98, allowing for the share splits.
>> This is a reflection of the extremely negative sentiment held by almost everyone involved in the market.
People are putting their money into the homes. I think home ownership is at all time high, especially considering the higher unit value of housing. Since employment is below highs, that means people have less discretionary money in total terms, and they are putting more of it into housing, leaving less for the enrichment of stock enthusiasts.
With stocks not paying dividends, the only reason to own stocks is price appreciation. Brokers traditionally need a prospect of rising earnings to be able to sell stocks on the basis of future appreciation. As long as CEO's refuse to forecast rising earnings, brokers can't sell, and us longs are stuck waiting for actual higher earnings to materialize before anyone gives us hard cash in return for our electronic entry in some share-holder database.
Let's hope the CEO's are just sandbagging.
Sarmad |
