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Trader on the New York Stock Exchange

BRENDAN MCDERMID/BRENDAN MCDERMID/Reuters

Skeptics of October's stock market rally pointed out earlier in the month that stock-trading volume was suspiciously low, suggesting that there wasn't widespread bullish enthusiasm for stocks, even as major indexes surged. Even with Thursday's massive rally, volumes remain lacklustre – and that's the biggest one-day move by the S&P 500 since August.

With just two trading days left in the month, the total volume of S&P 500 shares sits at a total of about 14.9 billion, as of late afternoon trading on Thursday. That works out to an average of 784 million shares a day. Yawn. If the average daily volume persists for the next two days, volume for the month will finish a grand total of just 16.5 billion shares. Another yawn.

That's not strong, and bears and skeptics alike believe it points to a lot of investors still waiting on the sidelines, unconvinced that October's big gains will last. The daily volume is below the 50-day moving average and the overall volume would represent the lowest level since July. And consider that during the sharp selloff in August, total volume for the S&P 500 was above 26 billion, with another 19 billion shares trading hands in September.

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Clearly, the bears had conviction during the selloff. Now, where is the conviction among the bulls?

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About the Author
Investing Reporter

David Berman has been writing about business and investing since 1995. He has written for a number of magazines, including Canadian Business and MoneySense. He worked at the Financial Post as an investing writer and daily columnist before moving to the Globe and Mail in 2008. More

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