Low Volume Meltup Resumes

Tyler Durden's picture

After last week we actually saw some volume participation for the first time in 2011, today the no-volume meltup has resumed. The chart below shows the relative to average volume in the ES. Which ironically shows the Catch 22 the banks find themselves in: the higher they run up the market, the less participation there is, the less trading volume, the lower commissions, and the lower the profits from the traditionally biggest contributors to bank P&L over the past 2 years: flow and prop trading (as confirmed recently by Goldman, Morgan Stanley, JPM, Jefferies and everyone else). Which simply means that banks will have to increasingly rely on the Treasury curve trade (and of course, fudged accounting) to make their bottom line. This would work if consumers had actually stopped deleveraging. Which they haven't. Meaning simply that banks will need to make all their trading profits on market distributions and other crashes that see volume spike. But that as we now know, is contrary to the Fed's third mandate. A curious bind indeed.

h/t Andrew Yorks

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thepigman's picture

Who would participate in this mess?

For the bernanke to do this, we must

be in much more trouble than we



SheepDog-One's picture

MUCH bigger trouble than most imagine.

Sudden Debt's picture

BAC is going down. That could trigger another gray swan :)



thepigman's picture

That pos should be nationalized and

its shareholder and bondholders


ak_khanna's picture

The markets will fall only when the banksters have eliminated all the short positions and only they themselves have positioned themselves to profit when the market falls


When an unexpected world event catches the banksters with their pants down and the softwares they use to rig the markets go berserk beyond their control.

Sudden Debt's picture

I love it when "they" talk about "them"

I always makes it so credible :)



plocequ1's picture

Who needs volume? Its alll digital

Sudden Debt's picture

Watching porn is also all digital


SheepDog-One's picture

Well thats the rub....sure go melt up the empty no-bid markets to placate the sheeple on their drive home from the unemployment office, but thats ALL you get as it doesnt actually do anyone a damn bit of good.

Go ahead and do the same yourself...put an ad in the newspaper to sell your 85 Benz which needs a ring job for $100,000...does it make you feel good to be so 'rich'? Whatever.

ZeroPower's picture

No bid markets? Plenty of bids today despite weak overseas action. Not that it matters, but for the plebs, maybe Dow 12k.


BTFD. Rinse, repeat.

No point in going against it. 

Bigger Dickus's picture

Watching the market go up since I closed my trading account and got into physical PMs a year ago has been a nerve wracking experience. Fuck fuck fuck

thepigman's picture

Robo and Wanker can have it. I ain't buying something

jacked by 40% by the bernanke. I

won't even rent it.

topcallingtroll's picture

But you would still buy silver jacked up over 40 percent?

SheepDog-One's picture

'Silver jacked up 40%'? Ignorant. Its not even near its historical fair value of 14:1 to gold. You big dummy.

SheepDog-One's picture

Personally I think we get a sudden down draft, theres NOTHING going on in markets and they need to shake things up even if it means getting everyone short suddenly for a quick scalping. With even the bears now capitulating and figuring you cant fight the FED, may as well go all in long after all 10% is the biggest downside risk possible, yea they can have it Im out for good. 

Cdad's picture


I hope you are right about the sudden drop.  However, I think folks got to understand that selling the market is not a matter of calling the minute the index finally turns...but rather finding stocks priced for stupid, or dot com, or even better...stocks priced for D. Tepper...and selling those.

Check the burritos.  Check the cloud.  Soon to join, the bank in charge of manipulating silver and drug companies that suck...Etc.  The ETFs can levitate the index all it wants.  I see a lot of the underlying issues deteriorating hard...and for weeks now.

Let's go guys...get your Whack-a-Mole game up and running already.

buzzsaw99's picture

The response to a "sudden downdraft" the last time was congressional hearings. There will be no downdraft, sudden or otherwise.

SheepDog-One's picture

Right, there used to be problems but they got all those fixed now. This time its different. Sure the peaks of all other bubbles had the same uephoric certainty that this time the bubble would never pop, but Im sure this time theyre right and their intention is to now forever prop stocks higher. Yea.

TruthInSunshine's picture

It's all good.

The Bernank and his supporters (some of whom have been pitching his 'merits' on no less than ZH, lately) arrogantly scoff at suggestions that the Chairman doesn't know exactly what he's doing, doesn't have 100% confidence in his plans and isn't 100% certain that all of his objectives can and will be achieved without things taking a turn for the very worst.

In related news, men throughout history have suggested they have devices to stop hurricanes in their tracks.

topcallingtroll's picture

I am not a bernanke supporter but he has played a bad hand very well so far. China had a good hand but has played relatively.unsophisticatedly recently.

SheepDog-One's picture

WELL pretty easy to play a bad hand when YOU are the house, make up the rules as you go, and have a gun to all other players heads!

topcallingtroll's picture

Intermediate top guys and a deflation scare coming our way. I am the top.calling troll and you must worship me. Dollar bottoming temporarily and may just trade in a channel.for a few years. The least ugly.girl out there with enough liquidity for the big boys is still the pimply faced dollar.

The Axe's picture

It is now official beyond belief, for today, higher tomorrow, then the next. The market is broken. Clue Robo to put charts of Solar companies, and hot girls in enjoying the sun.

plocequ1's picture

Dont worry, ZH will put up some more charts and make it all better. Please try to use more Red and green colors. I love Christmas.

TradingJoe's picture

This should be worth a few Put Contracts, or not?!?!

blackbox's picture

shrinking volume momo trades are sooooo 2010.


Ben wants 2011 to be the year of novomo!

cougar_w's picture

Paint, meet corner.

SheepDog-One's picture

Yes but we're told its a particularly sweet corner to be in, and that they can stay in it forever! Somehow I dont think so.

cougar_w's picture

Well you see that all depends on which part of the building is on fire, and how close your corner is to the exit out.

Sudden Debt's picture

Plane, meet builing


you know what....



FoieGras's picture

We had good volume in the Nasdaq short squeeze of 1999. Good volume doesn't mean you can trust a move and low volume doesn't mean a move can be recklessly faded.

lieutenantjohnchard's picture

the stockmarket represents little in the grand scheme of things in that the usa doesn't really have an economy anymore. sure, we have random transactions between businesses and consumers  - hate that word - dehumanizing. but for those with their eyes open it ought to be obvious. look at the number of pawn shows that are hits on the television. we basically have a garage sale economy with huge transfer payments to keep the folks off the streets and out of the pantry of today's rich.

thepigman's picture

If the bernank owns all this equity

and has stuck it in the Caribbean

somewhere, somebody oughtta let

him know he's been overpaying since

SPX 800.

SheepDog-One's picture

And paying more every day. Is that an endgame unto itself? No, whatever is next no one can see yet but its big and ugly. Even uglier than Napolitano.

thepigman's picture

Ya gotta laugh at him though. This

stuff won't be saleable at these prices

again for a generation.

thepigman's picture

Cramer must be a key adviser. lol

SheepDog-One's picture

Who do they plan on selling it all to? They can forget about me, no sale.

cougar_w's picture

Nothing wrong here that a bit of creative accounting couldn't fix. All that's required is that all the other playerz agree to play by the same whacked out rules indefinitely and nobody notice everyone else's hair is on fire and nobody bolt for the door first with their part of the loot. As you can see nothing can possibly go wrong.

buzzsaw99's picture

Volume down, dollar down, rally on.

john milton's picture

dow 12.000 party soon..ben must feel happy

onlymyopinion's picture

That's just a pre-party warm up till the biggie later this year.  You won't wanna be caught not in the market for the Dow 13k shindig.  All the kids will be there.  Be sure to keep your Nov/Dec calenders clear

SheepDog-One's picture

AHH HA HA yea 2011 is already PRICED-IN! 13,000 is a given, 14,000 is a done deal, RUN dont walk to get yours now while its all so CHEAP for the really big end of the year run! LMAO!