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Charting The Stunning Monthly Change In April ETF Volume

Tyler Durden's picture




 

According to the National Stock Exchange April is so far shaping up to be a very cruel month for banks. After the March spike in trading volume and volatility in the aftermath of the Japanese earthquake and Fukushima disaster, April saw broad market volume tumble, particularly as represented by the one "synthetic CDO" product that everyone appears to be in: ETFs. While in March, ETFs accounted for 31% of all equity volume, in April, this number dropped to 27.5%, although it is the key components that bear pointing out. The traditionally most popular ETF, the S&P500 SPDR saw its notional volume plummet from $637 billion to just $386 billion, a 40% drop. If this is indicative of broader stock trading, then April will be a disaster for bank trading desks. Other key ETFs fared comparably: QQQ dropped 22%, and the XLF was down 43%. There was, of course, one major exception. See if you can spot it on the chart below and which should make everyone who is in it very concerned about a possible Finra margin hike in the ETF (because Finra will never hike margins in pure equity ETFs) as was discussed previously.

 

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Tue, 05/03/2011 - 15:02 | 1235297 Transformer
Transformer's picture

And you guys wonder why the mining stocks are not doing so well.

 

LOL

Tue, 05/03/2011 - 15:01 | 1235305 Chuck Bone
Chuck Bone's picture

Mining stocks and gold are about to experience an enormous surge upwards over the next few months.

Tue, 05/03/2011 - 15:05 | 1235319 Cash_is_Trash
Cash_is_Trash's picture

Agreed.

The underlying money printing cannot stop.

Rhetoric, then margin hikes are simply plugging the holes in an otherwise capsized and sinking vessel.

Tue, 05/03/2011 - 15:26 | 1235430 chrisd
chrisd's picture

Unless they don't

Tue, 05/03/2011 - 15:34 | 1235455 Chuck Bone
Chuck Bone's picture

Can't argue with that. All I can do is make my prediction, buy some GDX, SLW, SIL, GLD, etc and hope for the best. Time will tell.

Tue, 05/03/2011 - 20:20 | 1236421 Transformer
Transformer's picture

The miners don't go up because all the newbies who don't know much about G/S buy ETF's.  They make a little money, they are happy.  The miners won't run like they did in the past until this gets worked out.

Tue, 05/03/2011 - 15:28 | 1235440 Bastiat
Bastiat's picture

After the piggies flush out the weak hands and take their stocks.  As Sinclair used to say:  leverage in anything to do with precious metals is a death wish.

Tue, 05/03/2011 - 16:35 | 1235679 disabledvet
disabledvet's picture

can't argue with the spike, though.  should have made covering margin easy "and then you have the shares."  amazingly "the CME agreed" and "started raising margin (interest) rates."  i say "mission accomplished CME"--did their job and crushed the speculators.  Does it have an economic impact however?  What are the job estimates for Friday?  Being revised downwards as we speak?

Tue, 05/03/2011 - 16:21 | 1235636 the rookie cynic
the rookie cynic's picture

We all need to have the "real thing." Most of the commodity ETFs are backed by quess what: OTC derivatives. Yes, you heard that right, T-bills. If the T-bill market goes to crap, then your precious ETFs will go no bid and you'll loss your money, just ask those people who had similar so-called "investments" that linked back to T-bills via Lehman Bros. T-bills are the giant open grave where paper money and paper assets will go to die. http://therookiecynic.wordpress.com/2011/05/01/tipping-point-toward-hype...

Tue, 05/03/2011 - 16:39 | 1235689 disabledvet
disabledvet's picture

what if "the real thing" is a default by a state in the US since it is well nigh impossible for the Federal Government to default but "more than capable of making member States default?"  "I hear the silence of Greece growing by the week."  I had my haircut.

Tue, 05/03/2011 - 17:06 | 1235758 the rookie cynic
the rookie cynic's picture

A default by one of the states in entirely possible. Nonetheless, I think the more likely scenario is yet more bailouts. Powerful, populated states like CA, NY, NJ, IL are major status quo players. They're also the most indebted. They will likely get bailed out by the smaller, weaker, if more fiscally responsible states via the toxic-asset-dumping-ground that is the Federal Reserve balance sheet. Ultimately this means the weight of the bad debt will run through Bernanke's printer. Defaults are just a lot more painful. Kicking the can down the road is the easiest route for those in power. Just my two cents.

Wed, 05/04/2011 - 05:53 | 1237264 bjennings
bjennings's picture

Don't make me laugh.  "the smaller, weaker, if more fiscally responsible states..."  You mean like Alabama where twice as much federal money is coming into the state than is going out.  Look at those states you list - CA and NY have almost twice as much federal funds paid vs. recieved.  Right now those states are carrying the load for the so called smaller, weaker, fiscally responsible states like Alabama.  And judging by your sentiments all they are getting for that gift is sand kicked in their faces.

Tue, 05/03/2011 - 15:00 | 1235300 oogs66
oogs66's picture

I'm convinced a big portion of volumes is HFT's that focus on ETF arb.  They buy the stocks and sell the ETF and vice versa.  With volatility decreasing there are fewer opportunities so that part of the HFT world isn't adding to volume.  As you take out HFT's we will see just how little real actual volume there is.

Tue, 05/03/2011 - 15:01 | 1235303 long-shorty
long-shorty's picture

Why did I sell our SLV puts for only a $25k profit again? :-(

Tue, 05/03/2011 - 15:25 | 1235428 Robot Traders Mom
Robot Traders Mom's picture

because you are trading on one of those 'for fun' websites that teaches kids how to invest.

Tue, 05/03/2011 - 15:44 | 1235503 equity_momo
equity_momo's picture

+ chuckle

Tue, 05/03/2011 - 16:42 | 1235693 long-shorty
long-shorty's picture

that was excellent. +1 for you.

anyone wanna borrow my copy of "Position Sizes for Pussies"?

Tue, 05/03/2011 - 15:02 | 1235307 NOTW777
NOTW777's picture

looks like there are good reasons for the friday release of birth cert. and the sun

OBL announcement - wild week is here

Tue, 05/03/2011 - 16:43 | 1235696 disabledvet
disabledvet's picture

you forgot "The Wedding" and "The Beautification."

Tue, 05/03/2011 - 16:54 | 1235727 Ratscam
Ratscam's picture

Wedding

Birth

Death

too much for an extended weekend, looking forward to the world news on 

6.11, 6.13 and 6.21.

Tue, 05/03/2011 - 15:04 | 1235322 6 String
6 String's picture

Righty-O. And the robots just have to ramp into the close, right? Isn't that the MO.

You see, if stocks don't ramp into the close things will unravel, now rather than later. The trading in silver has already broken its pattern: the 6 dollar sell-off during Asian time on Sunday was a tell-tell.

It will also be a tell-tell if stocks can't ramp into the close. I mean, apehshit seriously, dollar down with PM's down, Crude down...the Federal Reserve cordinated take-down could be commencing, like, errr, NOW.

Tue, 05/03/2011 - 15:31 | 1235439 6 String
6 String's picture

Ah....all is normal. Stocks ramping into close. Dow will end flat to maybe even up.

Silver is ramping down into the close.

Just another day in Fraudville.

 

Tue, 05/03/2011 - 15:57 | 1235545 6 String
6 String's picture

....and there she goes: GREEN.

Tue, 05/03/2011 - 15:11 | 1235324 HUGE_Gamma
HUGE_Gamma's picture

flash crash aniversery on friday :).. sell in May strikes again

Tue, 05/03/2011 - 15:08 | 1235330 Cdad
Cdad's picture

This very fact, volume in other things drying up, is why the margin requirements are being hiked in commodities.  The Chairman will not be satisfied until ALL have followed his orders to reallocate their investments into junk paper...here at the tippy top of the most obvious about to fail market top EVER.

This is the wasteland that Ben Bernanke, Mary Schapiro, Hank Paulsen, J. Dimon, and L. Blanfein have made for us.

 

Tue, 05/03/2011 - 15:51 | 1235521 Groty
Groty's picture

I've been expecting a 10%-13% market correction since December.  It just gets more and more overbought.  The longer we go without a correction, the harder the ultimate drop is going to be.  They should just let it correct and get it over with. 

Tue, 05/03/2011 - 15:19 | 1235385 NOTW777
NOTW777's picture

now that is interesting

Tue, 05/03/2011 - 15:31 | 1235442 Rusty Shorts
Rusty Shorts's picture

yes indeed it is!!

Tue, 05/03/2011 - 15:14 | 1235333 gwar5
gwar5's picture

Silver shines like a good deed.....

Tue, 05/03/2011 - 15:36 | 1235362 gwar5
gwar5's picture

What is the meaning of a gold standard and a redeemable currency? It represents integrity. It insures the people’s control over the government’s use of the public purse. It is the best guarantee against the socialization of a nation. It enables a people to keep the government and banks in check. It prevents currency expansion from getting ever farther out of bounds until it becomes worthless. It tends to force standards of honesty on government and bank officials. It is the symbol of a free society and an honorable government. It is a necessary prerequisite to economic health. It is the first economic bulwark of free men”.      W. E. Spahr. 

 

(Gwar5: Don't even know who Spahr is yet, just happened to run across it. update Walter Spahr, Economics Chair NYU, 1927-56; quote comes from Daily Paul, of course.)

Tue, 05/03/2011 - 21:29 | 1236588 Mesquite
Mesquite's picture

>gwar5

Check the years (lifespan)..

Did he speak out and get 'suicided' for his honesty..?? Curious...

Tue, 05/03/2011 - 15:14 | 1235349 Deep
Deep's picture

Hey tyler, where is your

 

"silver now 46, 45, 44, 43,42"

only on the way up huh?

 

 

Tue, 05/03/2011 - 15:16 | 1235379 HUGE_Gamma
HUGE_Gamma's picture

he reversed the position at $49.45

real traders go both ways

Tue, 05/03/2011 - 15:19 | 1235392 Deep
Deep's picture

I am not knocking him. Love his work. THE BEST

But when silver hits low 30's is he gonna write about it?

 

 

Tue, 05/03/2011 - 15:30 | 1235429 HUGE_Gamma
HUGE_Gamma's picture

"Silver at $35.. the FED wins" lulz

lets see where this finds support.. people holding physical from years ago are still smiling, people were calling at top at twentyfour

Tue, 05/03/2011 - 15:45 | 1235470 Deep
Deep's picture

I was not calling top, i still think silver hits 80-90 when everything is said and done

even at low 30's, no trend line is breached

silver was a bubble at 50's

when i am walking by department stores and the tv salesman is taking silver, ya thats a bubble

 

 

Tue, 05/03/2011 - 15:57 | 1235557 MrBoompi
MrBoompi's picture

If silver hits $30 you bet we'll be talking about it, because the only question is how big of a truck we'll be loading up.

The SLA is into ounces, not $$$. Selling paper will not increase the supplies of physical silver, it will decrease them. This is the beauty of it all....

Tue, 05/03/2011 - 15:19 | 1235382 Tyler Durden
Tyler Durden's picture
by Tyler Durden
on Mon, 05/02/2011 - 18:24
#1231995

 

... since metals
trade in a paper world, there will absolutely be a correction, even as
central banks continue to turbo print. For all those who believe,
correctly, that fiat is doomed, any intermediate variations should be
more than irrelevant. OTOH any "traders" should have booked profits last
week when our friends at FMX advised to do so.

Tue, 05/03/2011 - 15:40 | 1235482 long juan silver
long juan silver's picture

Looks like a hickory stick has been pulled out.

Tue, 05/03/2011 - 16:41 | 1235697 mayhem_korner
mayhem_korner's picture

+1 Tyler.

As of 1600 EDT, silver was at $41.50.  That's a drastic move to...hold...hold...12 trading days ago.

I can wait these guys out because I'm holding the stuff and can clink my oz together.  If it falls to $35 or $30 or whatever, I will just get my hands on more of it. 

For you amateurs at macro issues, the fundamentals are not changing - $14.3T of insurmountable U.S. Sovereign debt and two options.  Print the fiat off a cliff (99% chance) or walk away from monetization and collapse the system with double-digit yields on Treasuries.  No elected person is going for option b.  So we store and wait.

Tue, 05/03/2011 - 18:14 | 1236009 Kina
Kina's picture

Hey tyler, where is your

 "silver now 46, 45, 44, 43,42"

only on the way up huh?

 

Really, you should read the posts on ZH all the way through before making a fool of yourself.

Tue, 05/03/2011 - 15:14 | 1235367 monopoly
monopoly's picture

Just biding time now. Our turn will come....again. The Dark side in control now. They made good moves.

 

Tue, 05/03/2011 - 15:18 | 1235389 youngman
youngman's picture

I see the change or rush to PM´s as a good thing...People are waking up to the crap out there...Gold vs Netflix.....I´ll take gold...but I do not believe in the ETF´s. They have to many holes in the prospectus to worm out of paying you if and when you need it....or earned it....Buy the real stuff....let the computer jockeys play all the way to their Hell.....the day they realize that they have nothing but paper....

Tue, 05/03/2011 - 15:40 | 1235473 unclebigs
unclebigs's picture

Gold and Netflix is the same trade.  That's what you stupid Goldbugs don't understand.  For right now, I'll take cold hard USD cash.  LMFAO!!!!!!

Wed, 05/04/2011 - 00:20 | 1237010 StychoKiller
StychoKiller's picture

Need some POMO-Ade to wash down your upcoming FRN salad?  I understand they're a little dry, but here's the good news:  Paper (even with pretty green pictures!) is worth around $85/ton -- so you got that goin' for ya!

Tue, 05/03/2011 - 15:19 | 1235393 monopoly
monopoly's picture

Why are some of you so disgustingly violent with your words? Since when does a market move straight up with 0 corrections. Are you so petty, so jealous, so absolutely stupid to not understand what is going on with this planet. Why don't you go someplace else where people may care about your garbage posts.

Yes, miners, silver, gold are all down, yes lots of red for me on my screens,just part of the process, but when it is all good I do not swamp the site with "I told you so". Why don't you morons grow up or just disappear. What a sad group you are.

Tue, 05/03/2011 - 15:31 | 1235438 unclebigs
unclebigs's picture

Dude, I'm sorry you're getting Corncobbed.  I really am.  The stupid and their money always part ways.  You have my sincere empathy.  LMFAO!!!!!

Tue, 05/03/2011 - 15:39 | 1235469 monopoly
monopoly's picture

bigs, am not at all down. Am up a great deal the last few years, but I do not brag about it and knock others like you do. You think it is stupid that we have been in gold since 600, you think it is stupid that we have been buying silver since 25. What is stupid are your posts that show you have an IQ of about 50.

It is fine that the dark side is winning now, but why post the crap you do, when you know nothing. Just have a good time on the dark side. Good for you. But turn into a human being and try and understand where we are coming from. Although, that may be too much for you.

Tue, 05/03/2011 - 15:41 | 1235486 unclebigs
unclebigs's picture

Dude, I bought silver at $6.25 and dumped the last of it on Apmex last week at $48.  By the time you came to party, I had already Quadrupled my money.  The precious metals trade is finished for right now.  You're too stupid to see it so you'll buy all the way down and end up completely Losing Your Ass.  LMFAO!!!

Tue, 05/03/2011 - 15:51 | 1235532 Mr. Q
Mr. Q's picture

what exactly are you arguing - did you even read his post?

congrats on the trade.

Tue, 05/03/2011 - 16:04 | 1235573 MrBoompi
MrBoompi's picture

I could make up any goddamn story I want about how brilliant I am too.....

Tue, 05/03/2011 - 16:44 | 1235707 mayhem_korner
mayhem_korner's picture

Did you sell both your oz at $48?

Tue, 05/03/2011 - 16:51 | 1235723 lieutenantjohnchard
lieutenantjohnchard's picture

my hunch is you're lying. only a sociopath would buy silver, hold it for years, sell at the top, and then denigrate fellow silver holders by calling them stupid, and bragging about their success. rather, he would remind them that along the way from $6.25 to $48 there were a lot of bumps and setbacks.

no. you're lying, a sociopath or both.

Tue, 05/03/2011 - 18:09 | 1235983 Kina
Kina's picture

Yeh and I gought silver at 1.50 and sold it at $48.00 LMFAO

 

We can all make crap up like you just did.

 

You seem to be simply a troll, and a pointless one at that.

Tue, 05/03/2011 - 15:32 | 1235451 treemagnet
treemagnet's picture

I think you've forgotten something...this is fight club.

Tue, 05/03/2011 - 15:35 | 1235462 Thunder Dome
Thunder Dome's picture

Sorry if I upset you, seriously.

Tue, 05/03/2011 - 15:39 | 1235466 Mr. Q
Mr. Q's picture

you may be correct with your longterm assessment, but you also have calculate in the cyclical (overshooting) nature of the markets and exit when the time is ripe.

the hype goes both ways: where are all the masses of people now who were bashing Dangertime and Simon Black's silver PUT OPTIONs (and "a rendevouz with a porsche")? Hello?

 

it's just a fundamental part of the game.

 

 

Tue, 05/03/2011 - 17:22 | 1235823 lieutenantjohnchard
lieutenantjohnchard's picture

btw: believe not a word from unclebigs and his talk about buying silver at $6.25 and selling at $48. he's lying. if he had bought at $6.25 and held for years he would be all too familiar with periods like we've experienced the last 3 days, and he would have offered a kind word of support.

he might work for one of the big dealers that needs merchandise. so he's going to zh to demoralize physical holders into selling their merchandise so they can sell it. that's one possibility. i know there are equally plausible other scenarios, too. more likely he's simply a sociopath.

Tue, 05/03/2011 - 15:27 | 1235422 Stoploss
Stoploss's picture

BINGO. Way to go TD.

Tue, 05/03/2011 - 15:30 | 1235434 apberusdisvet
apberusdisvet's picture

A mini crash to scare the fence sitters on the debt ceiling issue?

Tue, 05/03/2011 - 18:50 | 1236156 Rainman
Rainman's picture

QE recess means dollar strengthening. The maniacs on Capitol Hill will be front and center on the debt ceiling, but the boyz assume they'll all cave before the August recess. Read Timmay as he says he has enough fiat to get to Aug 2.....very clever.

Dollar and UST up . That makes the party even more fun.

If you're fed up with the American version of ponzi, you can switch over to the Chinese version ...... a Facebook-type IPO called Renren.

 http://www.bloomberg.com/news/2011-05-03/china-internet-stocks-tumble-ahead-of-renren-s-share-sale-1-.html

 

Tue, 05/03/2011 - 15:42 | 1235480 monopoly
monopoly's picture

Tyler, if you would turn Zero Hedge into a premium site, no matter how modest, do you have any idea of how much crap would disappear from the site. What a pleasant thought.

Like what i got and feel good about it.

Tue, 05/03/2011 - 15:41 | 1235487 jerry_theking_lawler
jerry_theking_lawler's picture

I made over 40,000 dollars today.....all while i was napping this afternoon. i awoke, and the bubble 'popped' and i lost it all....

Tue, 05/03/2011 - 15:47 | 1235515 TooBearish
TooBearish's picture

Perhaps ifn the price fixers at the banks/FED allowed for some 2 WAY FLOW they would have the volume they seek

Tue, 05/03/2011 - 16:39 | 1235663 Bob
Bob's picture

Funny post!  LOL.  Hiking equity margins.  Funny!  I notice the past few days that the much-beloved Russell 2000 has been slipping. 

What's up with that?  Is the Great Market God waning or warning?

Tue, 05/03/2011 - 18:23 | 1236038 Kina
Kina's picture

It is really apparent that there are many extremely bitter of how well gold and silver have performed, probably because they all lost their arses on equities in the last crash and in  spite hate to see others do well by opting into PMs.

So now they live as PM trolls with no purpose or value in life except to trash PMs whenever a dip or correction comes by. 'Unclebig' is a classic example of such a troll. A sad person indeed.

Tue, 05/03/2011 - 18:41 | 1236119 DosZap
DosZap's picture

It always hold true...............

You cannot outlast the markets.

Those fkrs will figure a way to ruin a great party one way or the other.

While continuing to murder the American public.

I SO want those bstds on a kabob stick I can taste it.

Do NOT follow this link or you will be banned from the site!