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Jerry,
Volume does not always follow the trend. This is referred to as a
divergence, and it can be a key indication of what is to come!
The stocks you observed showed a sharp drop in price accompanied by low
volume, during a strong bull market. Add it all up and you get the rebound
we had today! On the other-hand when specific stocks experience a sharp
decrease in price with heavy volume, they are more likely to continue their
downtrend.
I had been short SLOT for about a week, and covered yesterday. SLOT is an
example of a stock that was declining on heavy volume.
David Radtke
(Embedded
image moved metastock-list @ metastock.com
to file: 10/28/97 03:52 PM
PIC21827.PCX)
To: metastock-list @ metastock.com
cc: GROBERT1 @ aol.com (bcc: David Radtke)
Subject: Key reversals
I reviewed most of the stocks in my data base after Monday's collapse and
noted the large majority were down sharply but on no pick up in volume. In
many cases, the volume dropped well below the daily average.
Then I reviewed them again after Tuesday's rebound and discovered most had
huge volume increases and closed up after earlier lows...key reversals.
I would appreciate hearing from others what they saw. Not so much about
the
key reversal day on Tuesday, but the action their stocks had on
Monday.....the low volume on a sharp down day.
I always believed that volume followed the trend. Any comments?
Jerry
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