DOW JONES vs SILVER: Trading Volume Says It All

If we compare the Dow Jones Index to Silver, we can spot a troubling trend.  Normally when a stock price or index increases, so does the trading volume.  This was true for the Dow Jones Index from 2002-2009.  If we look at the chart below, we can see a normal market… increasing stock value and subsequent trading activity:

Dow-Jones-Trading-2002-2009

As the Dow Jones Index increased from a low of 7,500 in 2002 to over 14,000 in 2007, its trading volume doubled.  However, if we look at the next chart, we see a troubling sign.  As the Dow Jones Index increased from 8,000 in early 2009 to over 18,000 in 2015, its trading volume is currently 2+ times lower:

Dow-Jones-Trading-Volume

This is not a new concept as many analysts have been pointing this out over the past several years.  However the truth remains, the Dow Jones Index is being propped up by declining number of market participants.  So, who has the leverage to prop up a market with less overall volume?  Well, of course its the Fed and U.S. Treasury.

On the other hand, if we look at the Silver chart we see a much different picture:

Silver-Trading-Volume

Trading volume for silver continues to increase from its low in 2009…. even at a lower price.  Part of the reason here has to do with new exchanges opening up and joining the SILVER TRADING BANDWAGON.  Regardless, trading volume for silver has been increasing in a steady fashion since 2002:

Silver-Trading-Volume-2002-2016

Even though silver enjoyed a huge price spike and correction (2010-2013), its overall trend is still higher… so is its trading volume.  Thus, the Silver Chart shows a healthy combination of increased price and trading volume.   However, the Dow Jones Index has the BEST & WORST trading volume activity in the chart below:

Dow-Jones-Trading-2002-2016

As the markets continue to become more manipulated and rigged each passing day, at some point market fundamentals will matter.  Once this occurs, which market would you rather be in??  The Dow Jones Index, or Silver?

I will be soon releasing a new BULLET REPORT on the Gold Market.  It provides charts and data on how the recent flows are setting up the Gold Market for a big move in the future.

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23 Comments on "DOW JONES vs SILVER: Trading Volume Says It All"

  1. HFT’s and central banks propping up their paper empires. It’s their power basis, and it’s about time it all blows up in their faces. Bye bye pensions, legal and illegal immigration, EBT, Obamacare, savings accounts and stock portfolios.

    Hello new free world. I hope.

    • Could take longer than we would believe possible [from this point]. Like a patient whose heart beats but is brain dead. Some degree of life continues.

      They are actively shooting or maiming black swans.

      • Guess we’ll have to wait until they run out of paper. Oh wait…

        Like SRS mentions all the time; paper promises will blow up due to a lack of affordable energy. Until then, the printing press and algo momentums will pick up the ‘slack’, indeed.

        Well, it gives us more time to prepare.

    • I’m with you been preparing for this day

  2. Good to see a CHART up here Steve as opposed to a GRAPH… GOOD WORK… Lol

  3. Steve,

    I like the article, but the reason for the Dow’s dwindling volume of shares is because of stock buybacks.

    I’m not looking at any official data (as I am writing this) but I believe there has been at least a trillion dollars in corporate stock buybacks since 2009.

    I don’t doubt that you know this, but corporations buy back stocks to prop-up corporate earnings.

    Corporations no longer invest in their own companies to grow earnings because the return on their dollar isn’t what it used to be.

    Sadly, corporations can only show positive earnings by reducing the number of shares available in the market. (reducing volume)

    I could go on and on and write another article for you on the subject, but your conclusion is correct, the silver market’s growth in volatility has been caused by the opening of new market exchanges bring more participants into the silver market. A big positive for silver’s market and its future price.

    The implosion is happening now, because less companies are able to buyback shares, which is bringing down the markets, ultimately earnings will continue to hurt the market. And when the markets falls enough to scare the Fed, they will start QE again and drop rates back to zero.

    Then all Confidence will be lost in the Federal Reserve and precious metals will be one the last remaining alternatives to cash.

  4. HFTs really muddy the data. It’s not correct to equate trading volume with market participants over that time period. A very small number of market participants (those running high frequency trading algorithms) accounted for a higher and higher percentage of overall trading. HFT trading volume has been down the past few years, and during the years prior to that it was increasing. 2009 was actually the peak in HFT volume.

    Is the federal reserve propping up the stock market? Absolutely. But trading volume is not evidence of that.

    Mike

  5. David McCance | March 21, 2016 at 7:25 pm | Reply

    I find it so interesting the way Steve Rocco sees the markets like no one else. His analysis tells a story that other people don’t see. Very few people have the gift that Steve has of reading between the lines.

  6. Regarding the financial system at long term sight it looks really awful.
    In Europe the financial system is a joke.The “EZB” is buying now bonds to hold back the break of the
    southern contries.Additional they want buy bonds from companys.

    The Target System is not backed up buy anything.The Germans where export world master and get as securitys a paper.In earlier times it was backed up by gold.

    Even at the the helicopter money they are talking about.OK europe is not as great as the USA.
    When 5000€ fall from heaven i will buy silver and gold.

  7. I thought in Germany we have some of the most stupid politicians.But Trump,Hilton it’s like Freddy Krüger part 4.

    None of them(same for obama) is doeing something for the middle class.Soon all will have 3 or 4 part time jobs.It’s unbelievable.

    • “Soon all will have 3 or 4 part time jobs….”

      Or no jobs, and rely on government welfare, with cash income on the side, which is why so many of working age 18 to 65 are not in the work force AND not counted as unemployed.

      • Of course do not forget that many of those 16-64 who are not in the work force and not counted as unemployed are because the are not able or not available for full-time work.
        They are going to school full-time, or they are stay-at-home moms with small children, or they are permanently disabled and or they are retired. These people have never been counted in the unemployment number nor should they be counted.

        • “Of course do not forget that many of those 16-64 who are not in the work force and not counted as unemployed are because the are not able or not available for full-time work.”

          As it has been and should be. The difference now is not counting able-bodied people who have quit trying to work. In the past they would have been counted as unemployed.

    • Politicians are not stupid at all, they are doing exactly what their substance commands.
      Capitalism marches on its own logic and fate, politicans are just doing what they can to serve it, when entering its paroxistic crisis phase (begun in the late 60, early 70).
      In the next years/decades, you will see all different between west and brics disappear in order to save it. Prepare you to see universal income, global organizations like ONU and USSR control goods and services worldwide producation and distribution and so on.

  8. “at some point market fundamentals will matter. Once this occurs, which market would you rather be in?? The Dow Jones Index, or Silver?”

    neither. market manipulation and debt currency maturation has disconnected the entire world economic and financial systems from market fundamentals, so thoroughly and for so long that there now is no possibility of any recovery to market fundamentals. the disconnect is now too great. when the snap-off happens there will be little use for dollars, the dji, or silver. it will all have to be rebuilt from the ground up.

  9. But when we get a new currency you get at minimum the same price with silver as before the reset?

    • Over 80 % won’t even know what hit em !

      https://www.youtube.com/watch?v=HpXjQJr8gBk

    • Reset will be done by the west if that is the interest of the upper class.
      Eastern ones are still 50 years behind the cirve and are absolutely unable to do anything against the most advanced countries ie USA and germany.
      The only risk for anglo american oligarchy is the germany to make some kind of alliance with china/russia but even in this case, they have still a few decades left to act.

  10. Yes it looks really like the FED can do whatever they want with the PM-prices.

  11. The general public has awakened…..They are exiting banks by the thousands and cashing in 401K’s and the like for physical Gold and Silver…..Appears to be gaining speed fast as negative interest rates come online…..The (GETTING) well informed is rising from that 1 to 3% to 5% range…..We all see it coming…”paper is burning” (METAPHOR) or being printed to ZERO worth…Food prices quadrupled….The huge decline in orders and small business doors closing…..China admitted to the once exclusive only one club of “WORLDS CURRENCY RESERVE” held by the U.S. is gone, U.S. can no longer print worthless paper to pay it’s massive 20 TRILLIONS IN DEBT, and is now shipping GOLD in the MILLIONS of Ounces to pay it’s debt and to repatriate demands of other countries Gold held here…..World Bank and IMF now considering a consortium of other countries currencies to be added to that exclusive club…..China’s shipping containers and ships in port with no orders to fill them…..The Western Countries on the brink of total WAR with the BUTCHER KILLER “CULT” Muslim inbreeds….Economies going broke propping up welfare systems for killer Muslim REFUGEES…Israel “WILL” launch a preemptive strike against “IRAN”… This will unleash NUKES all over the Middle East, and maybe the world……Obama by “DECREE” raising taxes on Gasoline….8 YEARS AGO THIS WAS NOT THE CASE…….Best strategy for the U.S.: Let Citizens buy and store precious metals…Dispersing it to thousands of different locations…China does not dare do this….We know their storage sites…The Metals will not be usable for thousands of years if all goes south….The scenario’s are endless most appear imminent….The facade of stability in the world is crumbling at a seriously fast rate…..Be prepared for the worst…Hope and Pray for the best….Happy Easter to one and all……

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