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Light Volume Continues To Float The Markets

What can we say about this light volume in the markets? Often after the Labor Day holiday the major stock market indexes will experience more normal volume as the summer concludes and traders and investors get back to work. However, the volume has been extremely light ever since August 25th when the stock markets staged a two week rally into the Labor Day holiday in the United States.

Today the SPDR S&P 500 ETF (NYSE:SPY) is just trading 151 million shares as of 3:30 pm EST. This is very light volume for the highly traded index ETF. Often when the markets have extremely light volume this will usually favor an upside bias in the market. As we all know the markets have basically floated higher over the past couple of weeks. Generally, markets that rally in light volume and decline in heavy volume are not healthy markets. Therefore, when the sell off comes into the market it is usually very strong and often violent. This is just a word of caution as the major stock indexes continue to float higher almost on a daily basis.