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Volume Levels - Absolute vs. Relative

|Includes: Apple Inc. (AAPL), BKNG, GOOG, MA, NFLX

Much has been talked lately about the low volume levels. I suppose on an absolute basis that could be correct. Relatively speaking this may not be the case. Oh, I'm not saying volume is normal - whatever that may be. While there are a myriad of reasons for certain volume levels at certain times; beginning of the month, window dressing, expiration week, holidays and news. One of the chief complaints has been the low volume - however, volume has exceeded a good benchmark, the 30 day SMA on a regular basis. This marker has remained rather steady, too. Yet, many still complain. As an avid follower of volume for years I have made my living based on interpreting and analyzing volume levels. While I love to see strong volume levels for individual issues and indices - nothing better than a breakout/breakdown on massive volume. Yet, we are seeing consistent levels, especially as the market moves higher. Could high priced stocks be the reason? I think so. Today there are many names over the $100 a share range - AAPL, GOOG, NFLX, PCLN, MA to just name a few. Yet, when institutions make the decision to buy they have finite dollars (or so it seems). So, when buying a basket of stocks the amount of shares purchased is SMALLER for amounts or allocations. Make sense? buying a million dollars worth of AAPL today requires quite a bit less volume than the same amount of MSFT. So, we needn't be worried so much about the raw volume - the dollar volume is most important - and that level has been steadily rising for years.

by Bagger Vance