Ongoing Observations on NYSE Volume

I present below (click to enlarge) NYSE volume charts compliments of a reader who has noticed that unlike in the last 2003 "end of bear market" period, when New Highs and New Lows fluctuated constantly, indicative of broad buying and selling, the current rally which has brought 80% of all stocks above their 50 DMA, is much more indicative of very few people pushing trading at essentially the same price points as the New High/New Low has basically flatlined constantly from the March 9 lows.

Absent the very wide trading range that stocks have experienced (filling the major overbought gaps?), there is very little that can immediately explain this very odd NYHL behavior. I welcome any feedback and rational observations.

Then:



And Now:



Paging anyone at the NYSE for a plausible explanation for this phenomenon.

hat tip Scott

Comments

[maximummarket:]

Quant funds, etfs, emini futures, and leveraged etfs are much more prevalent than in 03. ex. The spread between the bid and the ask in the futures is so wide, one can bid up the entire market with a negligible amount of contracts overnight by just taking out the asks and bidding up prices. If certain technical achievements can be manipulated in extended hour trading and certain announcements or dovish speeches can be made on key charting days...the upward moves get exacerbated in a major way. This is causing many indicators to reflect skewness.

May 08 10:11 AM

[jacflash:]

Indeed... if that plunge had taken place over 7 months, and two months later we were ~30% off the lows, and we were looking at 12-month figures...


On May 08 08:16 AM doubleguns wrote:

> With that logic the Japanese market should not have any new lows
> since it has plunged from over 39000 to now the 8000's.

May 08 10:51 AM

[dcb:]

wondering of someone can explain to me when today I am looking at the volume on the S&P why the money flow is the highest between volume spikes. what is going on between spikes?

May 08 11:29 AM

[youshall.12:]

I believe the reason is only the traders are in the market and no investors on a long term basis. It is trading confined to a limited
to a very few number of stocks. Traders are watching the indicies
like a hawk and once they reach a certain level, traders unload them.

May 08 11:40 AM

[claremont:]

Can somebody help explain this to me? I'm new to these data and reading graphs like this. I get the basic premise in that the NHYL range for 2009 has remained relatively constant as opposed to 2003, where it varied differently.

The black line is the ratio of highs to lows, which is slightly over zero and has held there for about 2 months. How can the market gain 2000 points if this ratio is ~0?

Like one commentator said it would make sense to me that few highs and lows are being reached in the period because of the extreme highs from before the bubble burst.

Could part of this be that massive government and fed intervention has kept a multitude of stocks from reaching new lows, a type of indirect manipulation which has allowed for a mini rally?

May 08 11:54 AM

[dcb:]

computer on at about 12:45 today. nobody pushing market higher.

May 08 01:00 PM

[dcb:]

13:13, someone selling computer on.

May 08 01:22 PM

[West Coast ...:]

The "curse" of the 401(k): Trillions are sitting on the sidelines (money market with negative return after inflation - ours just yields 0.14%, no typo) and more flowing in constantly. There is no stop when this tide rises back into the market, as cautios and burned the fund managers might be.

Look at the cash ratios of the mayor stock funds (not counting individual investors going back into equities) - they are all increasing and burning a hole into the mind of their managers. A self-fulfilling prophecy of well-educated lemmings (which of those wants to fall behind in relative performance to the peers?). The market would be much lower if not for the 401(k). Don't bet against the market.Disclaimer: Just got back in Yesterday after the turn in the job numbers (second derivative > 0 as far as I can tell).

May 08 01:50 PM

[PROXIMO:]

I read where the late Jimmy the Greek once said "I don't need a quarterback to throw a game. I can do it with the right guard." Reminds me of this stock rally from March. A few well positioned specialists, motivated in a back room by an ample amount of E Pluribus Unum legal tender(and convinced it was their patriotic duty), would have had the motivation and the means to give the markets some gas to move forward. Some well placed trades to bring the suckers in. The big shots using the market makers to buy time. When the rally fades, and fade it must, rest assured, the same crooks who juiced it upwards will short it back down. IMO.

May 08 01:52 PM

[dcb:]

it is amazing. every time not happy with market computer on. afternoon run 14.10

May 08 02:18 PM

[dcb:]

once computer was turned on I new we were going to have a high on the s&P higher than yesterday despite sell off. what a joke

May 08 02:51 PM

[dcb:]

I watch for the computer action on the S&P even though I was not trading it. I was short oil way outside of the bollenger bands. things weren't moving, but looked like I was going to do well into the close. I bought this afternoon. we were hitting good resisteance on s%P it was not going above the opening (which had a sell off so that made so it was no surprise. computer gets turn on I sold my short right away. new were were going to hit new high even though we had a nice sell off yesterday. you can see it every day when the market doesn't want to move higher. it gives that little extra push. 6 new highs in 8 days, even after high sell off days like yesterday. give me a break. what a joke. we have been selling into strength, but they turn on the machine and it goes above the opening high sell off.

May 08 03:30 PM

[Fred Voetsch:]

On May 08 08:22 AM Wefwef wrote:

> This rally is completely fake, created by Big Boys buying. Still
> it presents profit opportunities for nimble and courageous traders.
>
>
> But it cannot last, unless the market throws any kind of valuations
> and long term profit calculations out the window.
>
> Measured by earnings as reported, P/E of S&P 500 is over 60 already...
>
>
> online.barrons.com/pub...
>


DJIA P/E ratio is at 43 and DJTA is at 54

...according to the Wall Street Journal (ignore ANY data provided by Birinyi Associates as they literally make up the data they provide to other companies such as the WSJ)

online.wsj.com/mdc/pub...

PE of the NASDAQ 100 is 64

...according to www.bullandbearwise.co... which uses up-to-the-minute earnings data.

Standard & Poor's earnings data is at
www2.standardandpoors....

May 08 07:03 PM

[dcb:]

I am not saying to bet against the market. I am saying the market is being manipulated. Apparently i doesn't matter to the authorities what trust their is in the markets, or how honest they are. what matters to them is that coldman et all can use them to profit from to make up for the mistakes they made. it is another form of wealth transfer the government is giving the banks behind the public eye and in a way they will not have to get congressional approval. The banks are insolvent, so they let them do what they want to make money and not be insolvent anymore. this way we don't talk about nationalization. It all is just more proof of how wall street controls our country. look up the writings of simon johnson on this site (former head IMF). read below:

"The Greatest Boondoggle in History": Banks Buoyed at Taxpayers' Expense
Posted May 08, 2009 04:05pm EDT by Aaron Task in Newsmakers, Recession, Banking
Related: WFC, MS, BAC, C, XLF, ^DJI, ^GSPC
Bank stocks soared Friday, including Wells Fargo and Morgan Stanley, which sold shares a discounts of more than 10% below Thursday's close.

The ability of banks to raise capital is certainly positive but the idea of shares rallying amid the capital raising and dilution is "counterintuitive," Bank of America CEO Ken Lewis said on CNBC this morning.

BofA shares were also rallying even as the government said it needs to raise an industry-leading $33.9 billion. Citigroup stock was also a big winner after the government's curious declaration that it "only" needs to raise $5 billion.

While much of the focus is on the stress tests and banks' efforts to raise cash, the real story is Geithner's Public-Private Investment Program (PPIP), says William Black, an Associate Professor of Economics and Law at the University of Missouri - Kansas City.

The PPIP is the "greatest boondoggle in the history of the world," says Black, a former bank regulator who was counsel to the Federal Home Loan Bank Board during the S&L crisis. As occurred during the S&L era, Black says the PPIP will allow banks to exchange "trash for cash" and turn "real losses into faulty gains."

If the goal of Tim Geithner and other regulators was "to rip off the American taxpayer for the benefit of the least-deserving wealthiest people you can imagine, well - mission accomplished," Black says.

It is all part of the biggest scam in the history of the US.


On May 08 01:50 PM West Coast Commentator wrote:

> The "curse" of the 401(k): Trillions are sitting on the sidelines
> (money market with negative return after inflation - ours just yields
> 0.14%, no typo) and more flowing in constantly. There is no stop
> when this tide rises back into the market, as cautios and burned
> the fund managers might be.
>
> Look at the cash ratios of the mayor stock funds (not counting individual
> investors going back into equities) - they are all increasing and
> burning a hole into the mind of their managers. A self-fulfilling
> prophecy of well-educated lemmings (which of those wants to fall
> behind in relative performance to the peers?). The market would be
> much lower if not for the 401(k). Don't bet against the market.Disclaimer:
> Just got back in Yesterday after the turn in the job numbers (second
> derivative > 0 as far as I can tell).

May 08 07:33 PM

[Jasper M:]

dcb -
Actually, if you think the market is rigged, you probably Should short the market, as these things tend to blow up in the faces of the riggers.
These sorts of things are impossible to keep secret (thanks to people like Tyler). And once any given market participant (or potential participant) decides things are slanted against him, he will tend to withdraw, removing demand, and thereby dropping prices.
If the rot is broad enough, eventually even fairly well connected people start to wonder if they are being 'played' by Better connected people . . . and They will withdraw.

Personally, I think the current situation is a bear's wet dream. The only way it could be better is if the VIX was low . . . oh, wait . . .

May 08 09:59 PM

[Old Trader:]

youshall..

It appears you're entirely correct. It was pointed out to me that several days ago, a sharp "up" day, 39% of the NYSE was attributable to just 7 stocks....4 banks, and 3 financial ETFs. There appears to be little doubt that the major indices are being "massaged".


On May 08 11:40 AM youshall.12 wrote:

> I believe the reason is only the traders are in the market and no
> investors on a long term basis. It is trading confined to a limited
>
> to a very few number of stocks. Traders are watching the indicies
>
> like a hawk and once they reach a certain level, traders unload them.

May 08 10:17 PM

[kmarkt2:]

It is the TARP money at work, all USD 787 Bs. Treasury and Fed are in collusion with Wall Street again to whip up the sleeping bulls that could bring the rest of the cows to the market.
Analysts and economists react in real positive fashion to smaller than expected losses, without so much as having disclosed what these expectations were at priori to the stress test of the 19 banks. So, we are asked to deem a reduce rate of decline as euphoric, remain blinded to the fact that potential earnings are dismal.
As far as Goldman Sachs, JP Morgan, et.el goes, its not their money that they are placing the bets with, but tax payers'. Profits are for the Goldmans and Morgans; losses its PRAT ( Public Risk Assets, Thanks) - your money.
Start calling on President Obama - he is giving Geithner too much credibility; ever wonder, why the Fed is sitting quiet - they are controlled by 'The Moneychangers' of Wall Street and what is going on is according to script.
What kind of bull(****) comes after this whipped up bull rally, that we are expected to buy into ?

May 09 04:59 AM

[kaco:]

The positive sentiment as mentioned before is due to only a few index-heavy waits like banks. This is only a correction of the very depressed mood and hope the economy will recover.
If the economy would reignite, with all the money thrown at it, parcel deliveries and heavy truc producer would be the first to profit.
One mayor heavy truc producer reported a 75% drop in sales compared to last year!. Afther some window dressing the markets will be confronted with some bad corporate news as banks are still providing far less credit towards corpartions as needed (because they need to keep all possible profits inhouse to be able to write down new losses in real estate and bad loans as the recession continous.

May 09 06:54 PM

[User 109438:]

their buying are focused on some stocks only, which does not affect NYHL much




On May 08 06:17 AM Economic Lens wrote:

> What is the chances that the government is either directly buying
> equities or having a few of their crony vehicles like GS doing the
> buying for them. This stinks of a very orchestrated event from the
> banks to the stock market.

May 09 09:48 PM

[vvvvviking:]

No question in my mind the Fed was buying index futures to prop up the stock market.


On May 08 06:17 AM Economic Lens wrote:

> What is the chances that the government is either directly buying
> equities or having a few of their crony vehicles like GS doing the
> buying for them. This stinks of a very orchestrated event from the
> banks to the stock market.

May 14 07:47 PM