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Technology Stocks : Semi Equipment Analysis
SOXX 309.36+2.2%Dec 3 4:00 PM EST
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To: Return to Sender who wrote (42628)1/12/2009 6:09:25 PM
From: Donald Wennerstrom1 Recommendation  Read Replies (2) of 95520
 
RtS, It does look like the SMH fell below the up channel today. I put together a chart which shows the up channel, and also some "rough" lines showing trends for the price and corresponding volume over the past 3 months.


Price gets talked about a lot on this thread, but very little is said about volume. I would like to know more about how volume and price tie up together and what are we looking for now in the volume department to know when we are at a bottom.

I was looking for a trend in the SMH chart, but while their are some positive correlations there are also negative correlations. For instance, in late October SMH price was rising, but volume was falling. This negative correlation continued in Nov and into early Dec. Then in early to mid Dec there seemed to be a little positive correlation between volume and price. Then in mid Dec a sharp price drop occurred with a sharp volume decrease. Then in the last part of Dec, early Jan a nice price rise with perhaps a little volume increase. Finally the last 4 day fall off with some volume decrease as well.

Then I went back to look at the DJIND and SPX in the Oct 2002 area.



Both of these charts look rather similar with respect to price and volume. At the October bottom there was a small increase in volume, but volume was even heavier earlier in the year. Perhaps the time scale is too large to see the detail?

In any event, I have always had a hard time to correlate what to look for in terms of volume to help in making buying and selling decisions. Any discussion of addressing the volume issue by anyone on this thread would be helpful I am sure.
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