When trade volume is low it’s not uncommon to see unusual swings in price, as with fewer market participants making trades – moves are often highly exaggerated.
Forex Market Volume has been trailing off fairly steady since June, with yesterday and the day previous scraping the bottom – as the “lowest of the low”. Where’s the volume? Isn’t everyone back to work , sitting in their cozy little cubicles staring into the abyss of their computer monitors, toiling over every little “tick”?
As I understand it, U.S equities trade volume has now hit a 15 year low!
Perhaps the number of “risk events” still out in front us, has a large majority of traders “sitting on the fence” waiting for clarification, or perhaps tomorrow being Sept 11th, or perhaps it’s that tapering thing, or the debt ceiling or Syria. With so many factors it’s obviously a difficult thing to put your finger on one way or another.
Bottom line – It’s a ghost town out there with the bulk of trade volume made up of HFT ( high frequency trading ) computers just buying and selling to each other.
One needs to be cautious, and not let these “low volume pump jobs” throw you off your game. I would have assumed we’d be back up n running here as it’s already the 10th but as it stands. Chop, chop, churn, churn on “yet another” low volume day.
I’ve got 1680 on /ES SP 500 as a reasonable “top” for this last correction upward, and will be watching this in conjunction with the usual intramarket dynamics as things start picking up again.