There is a saying in stock markets that 'volume is the weapon of the bull'. This translates into a basic understanding that a high volume of buying demands will push the value of the stock market up.
So, you would surmise that recent increases in stock values would be underpinned by strong demand and an associated increased volume in trading activity. After all, for every 'buy' there has to be a 'sell'.
Well, there must be other factors at play here as, well you may have guessed what I am going to say next, while the S&P 500 index has been rising steadily over the last couple of years, the associated volume has just as steadily fallen.
You may well ask what the hell is going on? Why is it that falling activity (some say 'demand') is leading to increases in prices of stocks?
Well, funnily enough, the same thing is happening in the housing market. Despite lack of transactions house prices are still defying gravity and in some areas, still going up.
So what do we have? A market held up by central bank interventions? A magic carpet market that floats with no obvious means of support?
Or maybe it is actually a meeting of delicate supply and demand mechanics, just as in the current UK housing market.
The market will only fall if those that hold stocks and shares feel they have to sell at a lower price. If they don't have to sell then they will not sell at a lower price and the prices will remain high whatever the pundits may say.
If the buyers and holders are content to pay for or retain stocks for the income stream it gives them in the form of dividends or their perception of the value of them, then so be it.
Or is this falling activity/rising index a portent that the markets are overvalued and we are going to wake up one day to see huge falls in the index?