Trading Volume Counts, Too

摘要

You watch every wiggle of the Dow Jones industrial average. Ditto for every stock you own. That's all well and good. But if you really want to know what's going on, you have to watch not only the price of the shares but also how many of them change hands. Price movements may give you bad signals unless you read them in tandem with trading volume. Typically, volume is heavy when stocks are surging and lighter during the final stages of their decline. "It's all psychology," says Phil Roth, chief technical market analyst at Miller Tabak, an institutional brokerage firm in New York. "At the top of the market, investors are ebullient, and at the bottom, they withdraw into a shell."