Long White Candlesticks On Ever Declining Volume, Or Melt-Ups On Ten Shares Or Less Coming To A Busted Stock Market Near You
As the chart below indicates, the past two months have seen some dramatic moves in the market, beginning obviously with May 6, and continuing through today. As the highlighted long white candlesticks demonstrate, which are basically the 4 huge meltup days in the last 45 days, the volume associated with said melt ups has been occurring on increasingly lower volume. Of course, this is not surprising, and is occurring as a consequence of two trends i) ever fewer stocks determining the general direction of the market as pointed out yesterday, ii) implied correlation and stock dispersion at all time records or the "no alpha all beta" trade and, iii) generally declining volume with the bulk of it driven by HFT-dominated positive gamma ETFs such as top market volume SPY. As for those interested the actual numbers, the volume associated with the candlesticks left to right was 500.9 million, 395.5 million, 240 million and 248 million today. At this rate the next 300 move in the administration favorite Dow, or the next 40 moves in the ES will be on half the last melt up, then half of that, etc. Of course, all this means that very few if any retail investors benefited from today's move which, as always, was purely beta, and thus leverage, driven.