Trading Volume Tells a Story

If one looks at trading volume for the two large Stock Index ETF’s (the SPY and DIA) over the past year you see a curious pattern.  Volume peaked in March 2009 as the market made its bottom and has had a decreasing trend since, volume bottoming around October 14th of this year as Price made it highs.  Then a decline in market Price into October 30th was accompanied by an increase of Volume, and now a return to the Price highs is being accompanied by a sharp decline in volume.  What does this mean, just that price / volume relationships tell you a story about the belief level in the Price and it appears the market does not believe the rally since March, maybe it is right or wrong, but that is up to you.

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