Conventional trading “wisdom” states that a rally that occurs on falling volume is bearish. Conventional “wisdom” states that sustainable rallies should occur on rising volume.
This simply isn't true. As we said in Don't use volume for trading,
Rising/falling volume isn't a bullish sign or a bearish sign. It just is. Volume is mostly irrelevant. It doesn't give you much of an edge in the markets.
*We don't have volume data before 1998.
This means that a post-correction rally with falling volume is NOT a bearish sign. It is not an “ominous sign” for the stock market. It's an irrelevant sign.
Here are the bottom dates for those corrections:
February 11, 2016
June 4, 2012
October 4, 2011
