written by reader questions about stock volume reduction

By Anonymous Questions, December 23, 2020

Hi Travis,
I realized today that volume of almost all 20 stocks that I have, dropped significantly. This is rare and unusual and means money is moving somewhere else such as special stocks(SPAC’s), different sector, Bitcoin, or going out of market and cashed (due to new virus in UK, stock values being high, end of the year, Other reasons?).
I hold technology stocks, EV stocks, SPAC’s, renew/ green energy. misc ones( CHWY, LL, PINS, EXPI, etc.).
I really appreciate all your help and support and will be grateful if you shed some light over stock volume reduction.

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Travis Johnson, Stock Gumshoe
December 23, 2020 4:09 pm

Do you mean just this week? Trading volume just about always drops around the holidays. I am not a technical trader, I’d say that volume changes could certainly mean waning interest in specific momentum stocks… but I wouldn’t overthink it.

I usually ignore volume unless dealing with very small or illiquid positions, where a few hundred new investors could really Impact the share price on a given day… but probably someone who’s a more active or technicals-driven trader would have a very different perspective. Certainly there has been a new surge in chart-driven retail traders this year, and that can cause leveraged moves when technical signals indicate buy or sell.