Where is da volume?
Guest Post by D Short.
The S&P 500 is off to a great start for 2012, up 4.52% in the first 12 days of trading versus a 1.93% gain over the same timeframe in 2011.
But what about volume? I’ve seen a number of comments about the light volume of our “January Effect” rally. So let’s do a comparison with last year. First, here is a snapshot of the index with the volume shown below along with its 50-day moving average.
According to the data I downloaded from my Stockcharts.com subscription, the cumulative volume of the first 12 days of this year is 232.4 Billion versus 296.4 Billion in the first 12 days of 2011. That is a 21.6% decline.
While I am aware of the volume difference I think that the offset to your point should be the question of the dollar value of the volume between the years and not just the number of shares traded. Obvioulsy, where i have major problems is as a result of the HFT trading that just ramps volume with offsetting trades between stocks.After you finish the technical questions you have to go to the fundementals and here is where there is nothing to say. The monute you withdraw the fake spensing of the Governments the game is over.
No volume? That’s because the only thing pulling the market higher are robots. Specifically the algos in the ES and SPY. From there, all the algos running in the rest of the S & P 500 stocks key off of that movement and falsely drag the market higher. CNBC will then fill in the phony details later as to ‘why’ the market moved higher.
It’s basically the makings of a flash crash… and exactly what caused the flash crash back in 2010. No fat fingers, no HFT… just algorithmic trading strategies at the big banks and biggest hedge funds playing hot potato with the stock market until everyone realizes what a joke it is and runs for the exit. No doubt, HFT is making a further mess of things, but it’s the trading strategies at GS, Citadel, JPM, etc. that are inflating the market like a bubble ready to burst.
Eventually, when everything starts to implode, all those same trade-bots will race against each other at the speed of light to get out before everyone else. Flash Crash.
so many “gurus” …so few with a clue… it doesn’t matter why the markets are going higher…or lower…it doesn’t matter where the volume is…or isn’t…either a trader is on the right side of the move, or they are making excuses and curve -fitting stats to justify why they have been wrong so far…
all the stats and excuses in the world don’t pay the bills…my algos don’t care who, what, why, when, or how…only if the equity curve is rising…everything else is just conversation to justify why people have gotten it wrong…
as far as predictions of ‘flash-crashes’, loch ness monster and bigfoot, none of that matters either…we can’t trade in an imaginary world…many should spend more time reading the market and less time reading non-existent crystal balls…
Macrotrader, but you have been bearish on gold, what happened?
I don’t get bullish or bearish on anything….I place bets based on algos…some work out, some do not…I cut losses fast and ride winners…anyone who says they do not have losing trades is not living in reality…I have no attachment to any trades…it is all just numbers
Agreed!