I think what we are seeing is that volume has very little to do with price. I would have thought with this large of a volume drop, prices would have come down much more. This is part of the reason why I have shifted my view to a more moderate decline opinion. Volume also does not correlate to stock prices, even though many people mistakenly write about that relationship.
It will be interesting to see what the common correlations are between this decline and the 90’s decline, when it is all said and done, because there are already significant differences, especially in the lack of median movement.
I do not think we are going to see a crash, just a slow downward movement for a couple more years. We could not ask for much more than what we have had in terms of negative news for a drop, yet the bottom has not fallen out.
As it is with trading, you have to watch how prices react to news, and forget about your opinion about what should happen. The facts are that all of this bad news has not moved prices down much, so that is what matters, not what should happen. Maybe that is what should happen. An upwardly biased asset like a house should go down small amounts on bad news, because it is not an even playing field. Lack of downward price movement on negative news in assets is bullish bigger picture.
