Here's the question - do volumes matter?..

on the 11.07.13 (which is today) the Russian market grew by more than 2% on the overall wishful-thinking, supposedly, FED-driven optimism... with volumes as low as they were in 2003-2006...

what people seem to misunderstand is the very basic concept of supply and demand. low volumes is not just a tool used by TA analysts - it is also a demand indicator. low volumes means low demand. low demand in turn means - overpricing or oversupply. both are price pressure factors.

on top of that the constant withdraw of the money from Russia is also indicated in volumes...

well, and not to mention that this is nearly the most favorite tool the TA analysts use to justify their forecasts. but now they seem to forget about it...

personally i think this is ridiculous. and not just the Russian market. at least it's been deflating for a while now and some short term bounces are logical. but this data gets into the fundamental analysis because it shows the demand. shares are no different from any other goods. and when people don't want your good the tragic thing happens to it in terms of its price falling down. you can speculate on poor data only for so long, but it will eventually catch up to reality and it'll bite hard...


(first topic on volumes - is the Russian market over or under valued?)

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