Market Volume Tumbles To 50% Below Average As Dislocations Abound
A quick look at market volume: in a word - deplorable. It confirms what Gillian Tett said last week, piggybacking on our ongoing fund outflow observations, that there is "a loss of confidence – not merely in the idea that the future will
be a brighter place, but also, most crucially, about whether anybody is
able to predict that future at all." She concludes: "it is bad for investors to feel confused about the outlook for
government regulation or deflation; but it seems that nobody really
understands how the basic mechanics of the equity market work any more,
it is hard to trust that the stock markets are a good destination for
your money. Little wonder, then, that those US equity mutual fund
outflows have accelerated." Presenting exhibit A of precisely this phenomenon: today's ES volume is about the worst it has been in, well, ever, at 50% below average!
Another perspective of where volume has been in the past two weeks:
And a result of the ongoing dislocation in stocks, the bond to stock divergence is just plain silly now.