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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.
h/t credittrader
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I'm sure Abiggs can make a case that the market was truly oversold based on this chart.. or more like anyone that runs on blood wasn't buying squat. Oh - that's right. The ZH community doesn't have any objectivity.
July 6 ES vs AUD/JPY 7:30 to 10 am est.
You have conveniently dodged it for the last two days girlfriend.
Hey biggs, oversold is only a concept in your head.
Ah thanks for clearing that up professor Merton
Bow to professor Abiggs aka Leo the 2nd.
Interesting reply.
When someone questions your flawless logic, you retort sarcastically. Yet when you question someone elses logic using an FX pair (btw, i can pull one of the other major pairs out and find a weak argument against your thesis) you call them on it in several posts demanding they respond to you.
Since we were sold 'oversold', wouldnt that mean we were 'overbought' today as we're back to levels from around 5 trading days ago? Or would you prefer to respond by calling me by an another esteemed professor's name.
I see you've been following my posts big guy - so do you disagree w me then?
To answer you question, I was very surprised at the beadth and magnitude of this rally today but I will take it. Like I said earlier, the market was oversold once there a divergence in NYSE tick data started to appear last wednesday and lasted for 3 sessions. Same thing happened with the Vix - it stopped confirming the move down around the same time. I won't even get into the oscillators nor the fib at 1009. Oh, and most of the major correlations broke down on July 1st. So after seeing the lack of major selling after employment #'s on Friday, I went long S&P futures after the market shed off 10 handles in the last 5 min. AND that's my definition of being technically short-term oversold...
Now please point me to your "other" currency pair, maybe I missed something - I would like to learn if possible...
Thanks
Also, please note in an earlier post today that I mentioned that I sold my position at the end of the day (specifically 1059 on the ES).
And before you try to discern the meaning of my ES AUD/JPY question to Homer, please refer to yesterday's ISM and Nasdaq posts. You will understand why I keep bringing it up...
CAD/JPY is interesting as well... not that i agree with oversold, given the 10yr
Is there such a thing as underbought?
Yes.. gold.
taken from the latest story: "Investors and traders are have been scratching their heads the past few days as stocks continued to bounce around giving mixed signals. But today was a clear day of short covering from this much oversold market condition."
Thank You
That is all.
Dodged what? Your ability to proclaim your ability to predict the card that comes out on the river after betting hard on the come? Whatever. Stop confusing your luck with skill.
Exactly, it reminds me of 21 year old at a blackjack table. He gets all excited when he gets 4 hands in a row and starts the "I knew it" line of bullshit. This clown is on here trying to get someone, anyone, to give him a standing ovation for being lucky. Of course, you know it's true because he said he made "a ton of money" today. So, that's nice.
And I have observed the loudest guys in the casino are the ones winning with nickels at the crap table. Pit boss loves em. They make a lot of noise that might bring in a black chipper. The nickel guy's already toast. He's gonna lose it all eventually anyway because he's too amped and/or drunk to leave.....he's in the bag.
< worked the table in my youth >
I wonder who you're referring to?
No, just that TD's post wasn't objective as you claim that everything and everyone on this site like you in fact is. And don't get my words mixed up again - I'm not knocking ZH, this site has some of the best content on the web. BUT it's people like you that throw in their worthless, group think 2 cents and ruin it for everyone.
Isn't this supposed to be a forum for free exchange? I don't get why people like you like to belittle someone for presenting something outside of your group think realm...
You are pulling this site into the pessimistic version of CNBC!
+1
Becuase TD's Bloomberg is set to Pacific Time
here we go again.
FIRE in the paper ponzi shit hole!!
But why is the VIX still arround 27 if volumes are declining Tyler?
Mary had a little lamb and the Dr. fainted!! Possibilities are endless in paper ponzi rat bastard, as the world vermin spin? Even with the correct answer on the Vix? The last 2 remaining techno nerds running on non manipulated; suppressed market fundamentals just cashed in their 1 chip at casino royale!! Genuine 1982 real copper penny signed by lil scamBO!! Crumb from the beast masters table!!
Whatever the hell you're on, I want some.
Um, how about why do front month option premiums keep declining? How about theta.
Nice spike on down days, but have a 10pt+ positive move on the SPX and you can forget your gains in VXX
Because the market selling got ahead of itself. It's called a divergence.
I will play devil's advocate and compare the volume each day from 6/19. Doesn't look like much of a volume differential on the ES or SPY between today and yesterday and the previous 2 weeks of selling (with the exception of 2 days)...
Too bad I can't put up charts like TD...
Im surprised that nobody wants comment (I would imagine that this would be a sensitive subject) - I guess that the volume lines that I'm referring to are also a figment of my imagination as anything else on days that the market doesn't fall.
Quick and dirty snap of the spyders:
http://img36.imageshack.us/img36/5210/noobie.jpg
The less down days had less vol, the more down days had the most vol. And of course the up days had very little volume.
Nice - TD presented the same chart (different colors hehe). What is the relative volume differential between the down and up days (not counting the two i mentioned earlier) - 10 to 20 mill spy shares? Would you consider this a major relative differential?
Check out the ES, the difference is even smaller.
Personally, I do not consider this even worth noting because it is quite an insignificant differential in the scheme of things.
Let me know what you think (And btw I'm not looking belittle you nor do I want to get into a hissy fit. It would be good to be able to discuss my opinions. Please disregard my convo with homer. He took a stab at me first yesterday.)
That is a bit more than 10-20M shares difference. You can be as bullish as you want, but here is the rub, on a plus day like we had today you would think the volume would be through the roof. Does volume mean a ton at the end of the day? No, price action does, but volume does give a sense of conviction and that conviction is weak. Frankly, if you think it is normal to have the markets splash up (or down) so much on such odd volume spikes that is your business, but I call bullshit on it. In almost 20 years I have not seen such odd trading, ever. Personally, I think it is a symptom of a bear market rally that is sick and way long in the tooth. I guess you think it is a full fledged bull market and there is the difference between us, some would call it experience.
Why do you assume that I'm bullish? I see nothing positive in this economy. FYI today's S&P volume was 20 mil short of the daily avg...
Please read my previous posts before throwing in your 2 cents
yeah you can, you just need to know some basic html coding.
Here’s the tiny piece of code you need.
[img src=" "]
Simply insert the http:// address of your uploaded image between the quote marks above, then replace the square brackets [ ] with < > and you’re done.
Now, lets see the charts!
My charts are not html based, they are from the ib platform.
Besides, just look up the esmo and compare the daily volume starting from 6/19. Its on the web - no need for me to post it.
Excellent analysis, TD. Nice way to call the fraudsters out.
PPT refuses to give up that Dow 10k. Once again, they lunge over the finish line with 18 points to spare. A tragic comedy.
Hey! It's been a decade long love affair.
Yup......and what's the number of times for the 10k cross including today ?? Ten ??
Another selling opportunity.
+100 They are as graceful as bulls in the china shop. Reload!
multiple 3 and 4% up moves only occur during bear markets. Fred Goodman has some great stats on that.
Dats a fact.
yup
I smell foreign countries about to short attack our markets to the hilt and drive them into oblivion. The world is getting tired of the U.S. scams ruining their economies. I wouldn't be surprised to see stocks and bonds get crushed soon. Benny will have to inflate his ass off real soon.
you know, i've thought of this.....but i suspect if they do it, they will hit us where it will hurt the most. Since gold and silver markets -- Comex -- have the potential to take down JPM, i'd think they'd start there.....and work without mercy.
i mean, does JPM have any friends? Anywhere?
No friends for Jpig! The remaining banksters watching the FIRE in the paper ponzi shit hole burn this nation down, are running to find the few remaining body doubles which will take fiat currecies!!
J. Dimon is numero uno on theBamster's speedial:
http://www.businessinsider.com/is-the-obama-jamie-dimon-falling-out-a-pure-white-house-farce-2010-6
Behind a long line of rank'n file AmeriCON'd!!
Tired of the US?
I'm European, an trust me, you'll never hear a European who is serious say that.
We know that if the US goes well, we'll go well.
We aren't the fighting kind, and we oppose most of the US wars, but even so, we see the US as the police man of the world. You keep the muslims at bay. This world would look totally different if the US wasn't involved.
And whatever they say about Americans, you guys sure can build some Kick-Ass weapons to blow shit up :)
Yes we do sudden debt but we learned from the best London bridge head pikers in the business!!
I'm from Europe too. Aren't we the fighting kind? No more than 70 years ago the whole Europe was one huge battlefield, and everybody fought against everybody at lest once in the last 200 years. It's only a matter of time before history repeats itself.
...And time is running short.
"That which has been is what will be; that which has been done is what will be done. There is nothing new under the sun." King Solomon (Ecc. 1:9)
Yeah we kick ass. But in the end it really comes down to what is in our best interest, so if one day we decide Europe is harboring terrorists, say g'bye to your standard of living and if we don't kill you, you will have the fortune of living a misguided American lifestyle.
I am HEAVILY short this market, oh god, help me god help me, i swear i wont do it again, ZH told me to do it...
Fell for the death cross over huh? "In a bear market, surprises are usually, but not always, to the downside."
The trick is to not be so leveraged as to get blown out. The brokerage firms know exactly how short you are and how much the stocks need to move to generate a margin call.
Anyone remember back a few years when it was made a requirement to report who was short and how much(http://www.bingham.com/Media.aspx?MediaID=7670)?
The trick is to hedge so you limit your downside risk. You should always have a properly defined P/L plan before you put your money in.
Just one of those days, got carried away; i have hedged the positions outright... just so i can get some sleep. Couldnt handle another rally today. I thought i had put these days behind me; the inner idiot is obviously alive and well.
yeah with the major swings I haven't been able to adapt my system. My latest attempt was using ATR (both tight and loose stop losses) and I still keep getting knocked out. This is irritating.
Heavily shorting isn't a bad thing - just make sure you reload when the next herd of bulls comes at you (read: have some cash on hand to buy more shorts at elevated levels).
I'm not gonna lie though - it's too tempting NOT to short. Too much BS going in the market - where's that next Livedoor CEO at when you need him?
Its not that bad, the position is very top heavy, so i dont need much of a retracement...i will be up all night though shitting myself. Bad move, should know better.
Tell me about it, 8 percent wipeout in the account today, plus, another broker is trying to screw me for some dineros.
Not sure where to put this but I guess it could fit anywhere.
from the Ministries of Oceania...http://news.yahoo.com/s/zd/20100625/tc_zd/252238
The only winners in this Dante's Inferno, paper ponzi chit hole are those who know how and what to store for dancing with the devil deep depression II!! Break out the boogie woogie bugle boy for WWIII!
The market can be wrong longer than you can be right.
Let me get this straight.
Market shoots up on very little volume. Only a small number of stocks account for the market move upwards.
Once a certain price is achieved and the sentiment turns, investors come back in to buy shares at higher prices. These prices were only achieved by this low volume meltup.
Can you say, this is the most blatant pump and dump effort of all times?
SEC should shut down the entire market. This is criminal.
Maybe it's been this way forever, maybe this is the true nature of the markets.
But what is new is the exposure on sites like ZH to this practise.
Who in their right mind would gamble on these swings that are blatantly manipulated? Even when there's little yield on anything else. The losses for the mass of investors are the true performance measure and I don't even care to know how many investors are knee deep in debt because they thought they put money into stocks when they could have paid off debt or kept the money in savings accounts.
+100000000
I wouldn't make too much of today's action. It's summer. It's hot. Market was due for a sharp bear market rally. I personally don't feel I have any edge whatsoever in this market and haven't traded or owned stocks this year. I've tried to add to and hedge my positions in the precious metals, but, every time I buy a few puts, they just re-rally.
Gold and silver in particular are acting well. Until proven otherwise stock markets have rolled over and are in the midst of an intermediate term correction bordering on a bear market. There's been some debate on the significance of the 50/200 death cross seen on many charts including SPY and IWM.
Still plenty of room to unwind the over sold conditions, hit resistance, and collapse lower.
At this point it's lower highs and lower lows until proven otherwise.
Don't forget about the obligatory rally into earnings and sell off thereafter.
Hold on a second. They have been accumulating last 4 days, today was people who were held their shorts in panic-cover mode. This is perfectly normal market.
Bring on the fed tools.
http://www.youtube.com/watch?v=FTeWGD4Q9T4
Great stuff again, Tyler.
Can't wait to see you on Fast Money!!
Well since 90% of the people reading ZEROHEDGE have been scared out of their skins and are negative like this site.......of course they didn't benefit
believe it or not you can still buy good companies way off highs and make money when some logic returns
Today the market was up on a huge breadth surge.
Virtually every sector participated.
And the giant run in the utilities while Treasuries were selling off all day is highly unusual.
Not sure what to make of it, but we could have a big run off these lows for a few months.
Stick to posts of women please.
We'll know in a few weeks once Q2 earnings are released. If they are "better than expected" than I'm sure you're right and we will witness the HTF off and running. But 3Q (i think) will be a far different story.
bottomless Cool-ade well..
beats Iced Real- i-Tea.
About vola dispersion trading :
http://www.ivolatility.com/doc/Dispersion_Trading.pdf
Have fun !
Ok, i've decided i can't put it off any longer - here it is ...
Scary DOW monthly chart.
http://stockmarket618.wordpress.com
There's plenty of scared, cautious money on the sidelines. Yes, it may be dumb money but it's there all the same looking to catch a bounce.
Lets face it; the bears were wrong through the whole of 2009 so these players don't want to miss the next party.
The universe was kind enough to give us fairly pain-free but very noticeable warning, the flash crash....but we are not listening...eventually, we will have to hit over the head by a two-by-four to get the message...wish we could have avoided head wounds....
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