NASDAQ and NYSE Volume One-Year Seasonal Patterns $$

In the following charts NYSE (since 1965) and NASDAQ (since 1978) volume has been plotted 2014 through June 13 overlaid for comparison. The lines are calculated by taking difference between the volume for each trading day and the average daily volume for the year. If a trading day has been historically heavier than the average for the year, than it is above the zero line, if it has been a light trading day historically, it falls below. Due to sizable day-to-day variations in volume, a two period exponential moving average has been applied to smooth the numerous spikes (up and down) that exist in the raw data revealing the underlying trend.

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Note the yellow shaded box in each chart. This is usually the peak of the summer doldrums. Beginning in mid-to-late July or early August, trading begins to decline as more and more traders and investors depart from air conditioned offices in favor of beaches, back yards and beyond. As a result of this lack of participation, trading in August is often uninspired producing either a fractional average gain or a modest average loss depending upon index and timeframe chosen. This year, trading volumes peaked in March and have been steadily declining ever since. If the current trend remains intact until August, there may only be computers trading a few shares a day while most humans enjoy a vacation.