The Mysterious Case of the Vanishing Bull Volume 18 comments
May 22, 2009
| about: SPY
an article to
-
Font Size:
-
Print
- TweetThis
Some volumetric observations: the chart below (click to enlarge) demonstrates a "cumulative volume divergence from average" histogram. Recently, on up days, the volume has been significantly below average, and yet accelerates above average on down days. Another observation: on down days, the VWAP for the SPY is the magical barrier that simply refuses to be breached. Yesterday for example, the ramp into the close occurred despite that the volume pushing the SPY higher was again below average toward the end of the day.
Related Articles
|
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication in the last week
Seeking Alpha 100 » -
Fastest Climbers
Those with the largestSee all
increase in followers
in the last week
Fastest Climbers » -
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most activeSee all
Instabloggers.
Top Instabloggers » -
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
AAA rating talks (just talk) should be 'nuf said'.
I am getting exhausted with all the trading trying to determine if anything is REAL out there.
Particularly interesting is the lower volume towards when the market has been pushed up higher on a down day when all indications were that it would fall further. Manipulation is taking place here, and I am not a conspiracy theorist but a realist.
Gone away, gone away.
He's drinking more cool-aid, drinking more cool-aid.
Buy and pray, buy and pray.
I expect it will continue until banks have raised the capital they need per the stress tests.
It appears that the powers that be in the markets are trying to do the same thing to retail investors here (and with them, the rest of the world). Make the markets appear enticing and normal, so that the marks return and line up to be fleeced again. I would have thought that the US and its systems would be too sophisticated to allow this to happen, but if it walks like a duck, quacks like a duck, and swims like a duck, well ...
I really question how much the people running this show understand the system they are dealing with and what they are doing to try to control it. (Do they even know systems or control theory?) They give the impression of being waaaaay over their heads.
On May 22 09:36 AM AndrewBaker wrote:
> Nicely presented volume indicator: I'd noticed that the volume on
> the downside increased whilst on the upside it decreased, indicating
> to me that this rally is not a new bull market in the making, and
> your chart sets it out well.
>
> Particularly interesting is the lower volume towards when the market
> has been pushed up higher on a down day when all indications were
> that it would fall further. Manipulation is taking place here, and
> I am not a conspiracy theorist but a realist.
"Zero Hedge has posted a video of a Fox News interview with Doreen Morgavero and two other players. It's worth the drop over to ZH to watch this video which offers some shocking revelations and insight about recent market activity. From the transcript of the video:
"Something strange happened during the last 7 or 8 weeks. Doreen you probably can concur on this -- there was a power underneath the market that kept holding it up and trading the futures. I watch the futures every day and every tick, and a tremendous amount of volume came in a several points during the last few weeks, when the market was just about ready to break and shot right up again. Usually toward the end of the day – it happened a week ago Friday, at 7 minutes to 4 o’clock, almost 100,000 S&P futures contracts were traded, and then in the last 5 minutes, up to 4 o’clock, another 100,000 contracts were traded, and lifted the Dow from being down 18 to up over 44 or 50 points in 7 minutes. That is 10 to 20 billion dollars to be able to move the market in such a way. Who has that kind of money to move this market?
On top of that, the market has rallied up during the stress test uncertainty and moved the bank stocks up, and the bank stocks issues secondary – they issues stock – they raised capital into this rally. It was perfect text book setup of controlling the markets – now that the stock has been issued…”
Most MSM pundits are screaming that stocks are mispriced, meaning cheap, relative to their prices of the past few years. My own view is that stocks are currently expensive, and that assets, including stocks and real estate, have been mispriced for over a decade now, and are just in the process of returning to fundamentals.
The up days on low volume have allowed me to turn in some of the stocks purchased in February & March for attractive and unanticipated quick profits. Manipulation or not, I plan to take more profits if it pushes higher, and not buy any more unless it falls significantly lower, since the fundamentals are likely to eventually prevail. Artificial manipulation cannot hold-up asset prices until inflation catches up, as the requisite rate of inflation would cause total havoc.