Why is market volume so low? Jr. Dep. has an interesting analogy. In theory, 56% of the volume is controlled by Bots, and the other 44% is Bernanke alone (but read the CNBC article for a contrary view). – Ilene
Volume was lighter than normal for August, and so far it is also lighter than normal for September. How much lighter? In the first 5 trading days, September consolidated trading volume at the NYSE was down 31 percent compared to the same period last year. August volume was also 31 percent below the same period last year.
Why? Look at who does the trading:
1 ) High frequency traders are 56 percent of all trades. This includes proprietary trading shops, market makers, and high-frequency trading hedge funds, according to Tabb Group. But as volume and volatility drops, this group gets less opportunity to profit from the statistical arbitrage trades most of them do.
You can almost hear the fapfapfap every time you look at a damn chart, careful not to get any in your eye.
"Oh yes, we have a tremendously positive stock market here. The tenor and tone is good, the volume support is ok, all looks excellent for continued rallying on an improving outlook for the global economy."
You mean like this?
That’s a clever little search in which I asked for the highest-volume stocks with prices over ten cents (to exclude the little penny pumper stocks on the OTC market.)
Well gee, let’s add this up!
That would be about 2.126 billion shares in total for these four stocks, two of which (Fannie and Freddie) are so far underwater in their equity value (to the government no less!) that there is no chance they’re worth anything, yet they remain listed, and the other two are zombie banks with Citibank existing only because of $300 billion in asset guarantees by The Fed and Treasury (which, incidentally, is under investigation, and that assumes that the $300 billion is all there is. There is persistent chatter that the real amount of "back door support" that Citibank has is closer to a cool trillion dollars, although I’ve never been able to get anyone to speak on the record in that regard.)
So let me see if I get this right. 2.126 billion shares traded in four stocks, two of which that accounted for some 900 million of those shares are in companies that by any measure of accounting have absolutely zero common equity value whatsoever (and never will under any rational view of the future), yet NYSE Euronext continues to list them.
These four stocks represented thirty seven percent of all shares traded today.
Today 3,162 different stocks traded on the NYSE. These four represent 0.13% of the total, yet they comprised 37% of the volume. That’s an over-representation of nearly 300 times the average.
Now folks, let’s be straight here. Do you believe for one second that this is "great liquidity" added by the "high-frequency trading" computers that are almost certainly behind the vast majority of this volume?
This isn’t the first day with this sort of abnormal trading and volume pattern either. In fact it has been going on for the
In yet another move to make a mockery of so-called market transparency, and again with mad props to Zerohedge, we have this:
The Exchange has filed with the SEC to implement the decommissioning of the DPTR requirement following the July 10, 2009 trade date. Accordingly, the last required submission of the DPTR will be on July 14, 2009, which is the second business day after the last trade date for which the DPTR is required.
Go read the entire Zerohedge article; what this means, in short, is that the ability of people (like you and I) to see the fact that a handful of banks, most specifically Goldman Sachs, constitute the majority of NYSE trading volume – and they’re trading for their own book, not for customers, will no longer be disclosed.
This "back and forth trade" between a handful of institutions is nothing more than the old "pump and dump" game that has been played in the OTC market forever – and almost always screws the individual investor.
This is no different than you and I selling a house back and forth between us repeatedly, each time at a higher price. We both appear to be geniuses as we’re both making a "profit", right?
Well, no. One of us is destined to take a horrifying loss if we do not find a sucker to make the final transaction with.
The embedded scam is that real gains require real parties at interest and not a closed system of a couple of guys passing an asset back and forth in a transparent attempt to "bait" someone else into becoming the sucker to offload that asset to.
The parallels to the housing bubble are not coincidence. There is no "value" being created nor is there any actual value appreciation taking place when people pass an asset back and forth at ever-higher prices. Only when there are lots of parties participating on their own, organically, does a market truly exist and does value align with price. Otherwise the so-called "price" is nothing other than a cheap parlor trick.
Zerohedge has been documenting this game now for months as Goldman in particular has come to represent an outrageously large percentage of the entire NYSE volume.
This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible. Feel free to contact me directly at email@example.com with any questions.
Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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David Rosenberg, in one of his recent missives, wrote:
"Historically, when we are within six months of a recession, the year-over-year trend in the LEI turns negative while the diffusion index falls below 30%. At three-months away, the LEI is down 1% YoY and the diffusion index nears 25%. By the time the recession has hit, the LEI is down 4% year-over-year and the diffusion index is at 20%. Alternatively, based on the current trend in the LEI and the level of the diffusion index, history suggests that the next recession is at LEAST four years away."
This is pretty interesting coming from an economist/strategist who was formally considered a perma-bear...
The stock market is presently a roulette wheel with dimes on black and dynamite on red. We continue to have extreme concerns about the extent of potential market losses over the completion of the present market cycle.
At the same time, we have very little view with regard to short-term market action. If one reviews market action surrounding major pre-crash peaks such as 1929, 1972, 1987, 2000, and 2007, you’ll observe a sort of “resilience” in the major indices on a day-to-day and week-to-week basis even after market internals had already corroded. In 1987, for example, the break following the August bull market peak was largely recovered over the course o...
It starts out un-alarmingly. The optimism of German consumers weakens somewhat, according to the forward-looking Gfk survey, conducted on a monthly basis for the European Commission. So the overall index fell to 8.6 for September, from 8.9 in August. It was the first decline since January 2013.
The index bottomed in late 2008 below 2, after a breathtaking crash during the financial crisis. In late 2007, it had hovered above 9. Early 2014 was the first time since the prior bubble that the index broke above 8. And August’s level of 8.9...
Mt Gox may be long gone in the annals of bankruptcy, but its founder refuses to go gentle into that insolvent night. And, as CoinDesk reports, the disgraced former CEO of the one-time premier bitcoin trading platform has decided to give it a second try by launching new web hosting service called Forever.net and is registered under both Karpeles’ name and that of Tibanne, the parent company of Mt Gox.
Bulls are having their way as summer draws to a close. Indeed, U.S. stocks and bonds seem to be the best and safest place to invest in a global economy that is at once hopeful and cautious, with lots of available cash hunting for attractive returns. But now the S&P 500 must deal with the ominous 2,000 level.
In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable trading ideas, including a sector rotation strategy using ETFs and an enhanced version using top-ranked stocks from the top-ranked sectors.
Bullish investors continue to ride the way of improved...
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Options volume on the provider of futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals and alternative investment products is well above average on Thursday morning, due in large part to a sizable put spread initiated in the 19Sep’14 expiry contracts. Shares in CME Group (Ticker: CME) are up slightly on the day, trading 0.25% higher at $74.34 as of the time of this writing.
The largest trade on CME today appears to be a bear put spread in which roughly 1,500 of the 19Sep’14 74.0 strike puts were purchased at a premium of $1.44 each against the sale of the same number of t...
Author Helen Davis Chaitman is a nationally recognized litigator with a diverse trial practice in the areas of lender liability, bankruptcy, bank fraud, RICO, professional malpractice, trusts and estates, and white collar defense. In 1995, Ms. Chaitman was named one of the nation's top ten litigators by the National Law Journal for a jury verdict she obtained in an accountants' malpractice case. Ms. Chaitman is the author of The Law of Lender Liability (Warren, Gorham & Lamont 1990)... Since early 2009, Ms. Chaitman has been an outspoken advocate for investors in Bernard L. Madoff Investment Securities LLC (more here).
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Well PSW Subscribers....I am still here, barely. From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.
First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices. Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment. Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer. For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...
I just wanted to be sure you saw this. There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.
If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.
Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.
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