April 19, 2023, 8:46 am EDT
Low Volume Rebound (DIA)
We believe “Volume Precedes Price” in the technical analysis. It emphasizes the importance of the volume in addition to the price.
Using the featured chart of Dow Jones ETF (DIA), we can see that price actions have been very strong since mid-March. It accumulated more than 7% gains during this period. However, we can see the volume pattern is totally opposite to the price pattern. It was all the way down.
Basically, it showed the lack of commitment during this rebound wave from the institutional investors. Thus, we do not trust much about this rebound or rally.
The old saying “Volume Precedes Price” means that volume pattern gives a hint for future development. In this case, it does not confirm a bullish outlook for this rally.
Therefore, we do not feel very bullish about its development so far. We are waiting for outstanding volumes to expose its intention.