I may be incorrect, but I always thought that a volume indication of 45 x 10 indicated the volume of shares that the MM's were offering to buy at the bid or willing to sell at the ask. That is, MM's willing to buy 4500 at the bid and MM's willing to sell 1000 at the ask. I always thought that a bid volume greater than the ask volume was bullish because the MM's do not generally want to buy (like the rest of us) unless they thought it was going higher or had orders to fill at higher levels.... Put somewhat differently, it reflects a demand by the MM's to buy and a supply by the MM's to sell at the given bid or ask...when demand exceeds supply, prices rise (although I realize that this is not perfectly applicable).
I never thought that it was an indication of actual orders at the bid or ask since most market trades go through at the bid or ask, which would mean that there were 4500 shares being or willing to be sold by the public at the bid and 1000 willing to be bought at the ask, which would not be bullish. Here, supply would exceed demand and the price would drop.
I have also been of the opinion that the volume indications are only VERY short term indicators, i.e., the next 1-3 minutes, and can and do change as, if not more, quickly than the price depending on the specific cause for them in the first place.....
If I am out in left field on this, I wish someone who is certain that it is otherwise would clue me in....
Troy |
