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Strategies & Market Trends : Investor's Business Daily -- Ignore unavailable to you. Want to Upgrade?

To: adairm who wrote (122)	8/29/2000 12:57:50 AM
From: jbhernandez	Read Replies (2) \| Respond to of 164

Here's Monday's closing commentary for TC2000... Thought some people might be interested. Question from subscriber: Market commentary from practically every source in the past few months (since the April-May lows) has lamented the lack of volume whenever market averages or individual stocks have advanced. Investors Business Daily, particularly, of all the stuff I follow, has expressed repeated concern about advances on poor volume. Your evening commentary has, it seems to me, been the most even-handed in the assessment of the low volume that we have had in those advances we have seen in recent months. Worden Brothers response: Volume can be a valuable indicator of market strength or weakness, but it must be interpreted flexibly and with common sense. The basic theory is that a bullish market rises on increasing volume and falls on contracting volume. Conversely, if it rises on shrinking volume and falls on increasing volume, the message is bearish. In practice, it becomes more complicated. The price volume relationship may have different connotations depending on whether a stock is high or low in its swing. More important, notice that the basic theory is relative. You may have a bullish price-volume pattern within a broader period of overall light volume. Is that bullish or bearish? Light volume in the absolute sense is neither bullish nor bearish. It depends on the circumstances. These oversimplified interpretations you read in the press are written by people who were pulled out of a hat and assigned to the financial page instead of the sports page. -DW Just some food for thought! JBH