Loading ...Several things have happened to disqualify volume as having meaning, but here are a couple of them.
If two supercomputers want to control the price of something, all they have to do is sell to each other, or one buy the shares or commodity , and the other short the same shares or commodity, thus negating the other super computer’s buy but creating two trades every time that transaction is made. They can do this continuously, making huge volume while the shares or commodity go nowhere.
There was risk in doing this, called naked shorting if they did not possess the shares they were shorting, but IMO that was solved by the recent events happening with the on-line brokers offering “no commission trades”. My speculation is that the shares or commodity in the possession of the on-line brokers have been loaned or leased or rented to the owners of the supercomputers so they can claim to own them so they can make these buy and short trades legally.
Also, in margin accounts, if you are not using your margin, your on-line broker can lease that available margin to the owners of the super computers (say BlackRock and Vanguard and StateStreet) to cover the buy/short trades being made.
Difficult to explain but IMO that is what has evolved these last two decades and why volume is no longer and indicator of interest, and why the markets no longer make sense. All FWIW from Silverngold, but DYODD!