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Stock Volume Collapses: Must Be An Up Day

Tyler Durden's picture




 

Sure enough, just like every other single up day in recent history when the up volume is a pale shadow of what happened over the past 6 days of concerted selling, today was no surprise. As the MVOLNYE chart below shows, following a day in which almost 4.1 billion shares were traded, we followed up with a complete wash out in volume, as once again it was merely the churners and the vaporware algos that sent the market higher on horrible initial claims data, and a trade deficit number which was only lower than expected due to supply disruptions.... and somehow that is supposed to be good for the economy? As usual, the Wall Street shortbus brigade fails to understand that absent a massive stimulus in Japan, none of the recent weakness, which originates in Japan, will revert to the mean. And so far no stimulus is coming. Which means that the Q2 GDP "strength" due to the beancount GDP boost from artificially lower imports will merely serve to further collapse Industrial Production in future months. But one has to not get paid millions of dollars and work at 60 Wall Street to actually grasp this very simple fact.

MVOLNYE: 3.4 billion: 20% below the average, 743 million less than yesterday. That's all she wrote.

As for what today's VWAP strange attractor was, here it is: the 150DMA, which the robots hope will form an artificial support for the time being.

 

 

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Thu, 06/09/2011 - 16:24 | 1355546 Chasecran
Chasecran's picture

Melt on up...

Thu, 06/09/2011 - 16:46 | 1355631 bogey4
bogey4's picture

If you have a Bloomberg, you can apply the Regression analysis to the MVOLNYE Index GP function and it shows quite clearly what Tyler and others have been saying about volume.  It has been declining for a year, as the mkt has been rallying (quite opposed to historical behaviour) for virtually the entire time.

Thu, 06/09/2011 - 18:08 | 1355972 Doode
Doode's picture

Hohohohoho - it is clearly the 149 DMA and not 150 DMA where my massive robot armies are massing on their assault positions. Puny humans - I have them again!

-Robot commander

Thu, 06/09/2011 - 23:17 | 1356872 Quaderratic Probing
Quaderratic Probing's picture

Commander GS has completed the new VOLUME derivitive product levered 30 to one, these can be combined to 100 to one levered Synthetics.....Market volume will soon be 200 % normal and climbing

Thu, 06/09/2011 - 23:23 | 1356883 bigelkhorn
bigelkhorn's picture

 

The guy I follow saying there could be more down for the market on friday. 

His site is over at http://www.forecastfortomorrow.com/Trading-Club   

his stuff is magic, live videos are insanly good! and he called the crash back in 2008, he doesn't charge $900 bucks a month to join his site like those other SO CALLED idiot gurus!, in fact its so cheap to be a VIP member, I was almost in shock!!!. Well worth a look. 

 

Thu, 06/09/2011 - 16:27 | 1355551 dcb
dcb's picture

Weren't we duw for at least a few up days. i expect when dropping two to one. watch the euro becue it looks like dollar index is getting a buy signal,

Thu, 06/09/2011 - 16:25 | 1355554 Barb Dwire
Barb Dwire's picture

I had my ass handed to me most of the day. Short DIA and the Q's as well as short FAS - can you say wipeout? I expected a little bump today (.3%ish) not the huge action we saw. Nonetheless the end of day fade made me glad I held on. There's money to be made yet on the plummet.

Thu, 06/09/2011 - 16:25 | 1355556 Traianus Augustus
Traianus Augustus's picture

Go figure another scam day for TPTB to show they are still in control.  What else is new? 

Thu, 06/09/2011 - 16:29 | 1355558 The Count
The Count's picture

Silence before the storm my friends...

Thu, 06/09/2011 - 16:30 | 1355559 Josh Randall
Josh Randall's picture

Bilderberg market riggers are on the road - volume to return next week

Thu, 06/09/2011 - 16:26 | 1355560 MarketTruth
MarketTruth's picture

(Said like a Mexican within an old Spaghetti Western movie)

Volume? We don't need no stinkin' volume!
---------------
Meanwhile if there is actual volume due to you shorting banksters an ominious voice on your computer will say:

(Hal) What are you doing Dave...

Thu, 06/09/2011 - 16:27 | 1355561 Cdad
Cdad's picture

In true criminal syndicate fashion, Wall Street has found a way to make it so that the one statistic that could not lie...now lies.

 

Thu, 06/09/2011 - 16:31 | 1355562 AldoHux_IV
AldoHux_IV's picture

Silly sacrificial robots-- it's fractal time for the /es.

Thu, 06/09/2011 - 16:28 | 1355563 dracos_ghost
dracos_ghost's picture

Now that we have these stupid weekly options, expect a zero sum game on expiration and the market takes off everything it put on today.

Thu, 06/09/2011 - 16:35 | 1355568 NotApplicable
NotApplicable's picture

So, the only winning move is not to play?

Thu, 06/09/2011 - 16:36 | 1355580 Dr. No
Dr. No's picture

Strange game.
How about a nice game of chess?

Thu, 06/09/2011 - 16:38 | 1355589 Franken_Stein
Franken_Stein's picture

 

Let's play Thermonuclear Warfare.

The Iran-Contra-Option.

Boom - boom - boom.

 

DEFCON 1

 

Thu, 06/09/2011 - 16:47 | 1355604 augie
augie's picture

please, as if these gypsies could even play checkers. Unscrupulous. Thoroughly unscrupulous.

Thu, 06/09/2011 - 16:46 | 1355571 Franken_Stein
Franken_Stein's picture

 

Silver chugging along the MA100 while gold is in for a break out of the rising triangle at $1550.

Will definitely happen within this month of June, probably tomorrow or next week.

 

Oh, sorry, in German "Moving Average (MA)" is "Gleitender Durchschnitt (GD)".

Thu, 06/09/2011 - 16:36 | 1355572 Spalding_Smailes
Spalding_Smailes's picture

Got GLUU ... ?

 

Return

as of June 09 2011

Today       7.9%

1 Month   25.2%

6 Month  136.1%

 

 

Thu, 06/09/2011 - 16:33 | 1355574 GeneMarchbanks
GeneMarchbanks's picture

You guys are real persons trading this market? How brave. How dumb. 50/50

Thu, 06/09/2011 - 16:38 | 1355578 lizzy36
lizzy36's picture

Wall Street does not endorse simple facts.

Thats why the get the big bucks.

Thu, 06/09/2011 - 19:56 | 1356359 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Wall Street endorses lying and cheating just like their bankster backers. Gordon Gecko is proud.

Thu, 06/09/2011 - 16:41 | 1355584 Pepe
Pepe's picture

I vote for a national Charlie Sheen Holiday, to celebrate the New America

Thu, 06/09/2011 - 17:34 | 1355861 Hi Ho Silver
Hi Ho Silver's picture

Wiener can give the inaugural address.  Winning!

Thu, 06/09/2011 - 16:42 | 1355586 Waterfallsparkles
Waterfallsparkles's picture

A lot of Company's now have weekly options.  So, the Stock trades at or inbetween option prices all day.  Friday will be the same. No volatility and no surprises.  Prices are pegged for Thursday and Friday.  Two days out of the week.

It was always that during the option week before Monthly options the price was pegged to option prices.  Now it it is a weekly affair.  I think they instituted weekly options to keep prices stable.

What I find amazing is that the weekly options are really expensive and within 5 days your premium goes away.  I also find it interesting that most options are wide spreads like with Monthly.  Not sure why they do not make them 50 cents or a Dollar apart instead of $5. apart.

It appears to me that the Stock Market is now only a function of Trading Options for the Option Premium.  Or it is a Bribe me Market, where whoever buys the most options get the Stock to go were they want it to go.

Thu, 06/09/2011 - 16:50 | 1355611 LRC Fan
LRC Fan's picture

I agree, most of the weekly options are spread way too wide for one week.  But the SPY does have dollar increments which is nice. 

Lots of money to be made if you can get a big score on some weeklies though.  I remember back when silver got hammered, there were weekly puts selling for 1 cent one day, to something like $1 or $1.50 the next.  It was truly amazing.  I tried to trade some USO options and got crushed.  I prefer the QQQ to the SPY because tech has been underperforming lately but once I pile into the QQQ puts you can be sure they will rocket higher lol. 

Thu, 06/09/2011 - 16:56 | 1355695 Waterfallsparkles
Waterfallsparkles's picture

If you can control the Stock price with an HFT Computer you could sell Calls every week and make a fortune.  But, for the average Trader it is just a sucker bet.  I watched some of the Companies that have weekly options and they closed between 2 strike prices.  So, only those with the HFT know were they will trade on Friday.  To the higher strike or the lower strike.  And of course your option premium will be diminished by tomorrow due to time expiration.

Just who in their right mind thought up weekly options?

Thu, 06/09/2011 - 16:51 | 1355662 slewie the pi-rat
slewie the pi-rat's picture

w_f_s, i'm trying to follow you, when i think:  maybe these periods (and prices, too) within the monthlies = less VIX? 

Thu, 06/09/2011 - 16:38 | 1355587 cainhoy
cainhoy's picture

actually the "steenking badges" line is from the 1948 Bogie flick treasure of the sierra madre. another great line is at the beginning when a destitute bogart panhandles the walter houston character with, "can you stake a fellow american to a meal?" no food stamps then, but then that was the mexico of 1925. not many changes since then...

Thu, 06/09/2011 - 16:39 | 1355592 dcb
dcb's picture

the other thing I look at is the big boys have made good money on treasuries to sell now and put into stocks to juice things. be careful after the june 14th, end of quarter window dressing,

Thu, 06/09/2011 - 16:43 | 1355593 monopoly
monopoly's picture

Markets were oversold from my perch. An up day or two is in the cards to relieve the pressure. Nothing has changed. This has a good bear feel to it, for now. Just an oversold dead cat bounce.

Thu, 06/09/2011 - 16:46 | 1355601 Spalding_Smailes
Spalding_Smailes's picture

BESPOKE

Nice site ....

 

 

What's Leading and Lagging Today? THURSDAY, JUNE 9, 2011 AT 01:26PM

Below we highlight the performance of the S&P 500 and its ten sectors today as well as from 4/29 through yesterday when the index fell 6.16%.  As shown, Financials, Energy, and Materials were the three sectors that fell the most from 4/29 through yesterday, and they're outperforming on the upside today as well.  Industrials and Technology also underperformed during the pullback, but they're not seeing the kind of bounce today that investors in the sectors would hope for.  Health Care, on the other hand, outperformed significantly from 4/29 through 6/8 with a decline of just 0.74%, and today the sector continues to outperform the overall market with a gain of 1.33%.  Health Care is up 12.4% so far in 2011, which is by far the top performing sector in the market (Energy ranks 2nd with a YTD gain of 9.3%).

 

Thu, 06/09/2011 - 19:40 | 1356293 karzai_luver
karzai_luver's picture

Last clown I saw that paid any mind to those bums still thinks dow is at 20,000.

 

ha ha.

clowns , good luck they will bust you.

 

Thu, 06/09/2011 - 16:47 | 1355602 Pepe
Pepe's picture

Let us see: Clinton, Reagan, Bush, Obama, Palin, Gingrich,Weiner, Greenspan, Bernanke, Geithner...what the ..happenned to America?

Thu, 06/09/2011 - 16:58 | 1355709 alien-IQ
alien-IQ's picture

MTV launched in August 1981...and it's been down hill ever since.

Thu, 06/09/2011 - 16:50 | 1355648 Highrev
Highrev's picture

Low volume melt up right smack dab into a major short term sell zone.

Broken long term long setups, and important daily short setups in play on all U.S. indices using a well known fib. retracement TA technique. http://eminiaddict.com/

Momentum is down as measured by moving averages and momentum indicators. Uptrends have been broken and short term downtrends have appeared. Market breath is also down. This coming off bullish extremes in both price and sentiment with important divergences coming at important resistance. All of which suggests that short setups have a high probability of hitting targets.

Key words: high probability

 

Thu, 06/09/2011 - 16:58 | 1355691 knukles
knukles's picture

Remind you of the dot.com era?

My burn rate's bigger than your burn rate.

Thu, 06/09/2011 - 17:03 | 1355738 dcb
dcb's picture

as a general rule, look to close out shorts on thursdays. it look like the market does not like to go into the weekend on a bad note. an exception is treasuries. tlt. this almost always seems to go up on fridays. not sure I understand this dichotomy. i will often reapply shorts end on friday, or monday afternoon depending on the market indicators.

Thu, 06/09/2011 - 17:04 | 1355742 Caviar Emptor
Caviar Emptor's picture

Bots using fractals, "Fracking" stops then reversing hard to frack them the other way, stuffing quotes and reading flash orders every step of the way. Like playing poker

The market has lost it's prime function as discounting mechanism. Without that it's a zombie. And that's a sign of a dysfunctional economy.

Thu, 06/09/2011 - 17:15 | 1355789 dwdollar
dwdollar's picture

Algorithmica Bovinae.

 

Thu, 06/09/2011 - 17:27 | 1355840 rsnoble
rsnoble's picture

btw I am sitting right behind wallstreet at the moment, as soon as the janitor leaves im going to chop the power chord running into it. Funny part is everything would probably still open up tommorow like nothing happened.

Thu, 06/09/2011 - 18:03 | 1355969 rsnoble
rsnoble's picture

My personal t/a of the charts is a decline to the march double bottom which would also be in the area of the 200ma. Of course we have low volume that can screw that up. As far as being on the sidelines---today would not be a good day for entry in either direction based on the chart.

I might be a redneck hillbilly beerdrinker.......but I can read a chart just as well as any of the so-called experts most of the time and now I understand why they charge for their advice so they can have more gambling money and make their $ back for all the bs calls they make.

Thu, 06/09/2011 - 18:28 | 1356006 Fidel Sarcastro
Fidel Sarcastro's picture

BOTH Sept & June ES volume were far...FAR...less than yesterday's volume in June alone - like 45% less.  Yup, gotta be an up day.

 

Thu, 06/09/2011 - 18:28 | 1356007 Richard Whitney
Richard Whitney's picture

Citi traded 51 million shares today. But this is after a 1-for-10 reverse split about one month ago. That imputes a 459 million share reduction in volume.That is, 51 million today would have been 510 million before May 9. 459 million shares is almost four times the volume of taday's most active issue, BAC. That is significant volume disappearing.

Any other issue could have a reverse split without a blip. But the volume in C was always so enormous before the reverse split, dwarfing the rest of the top ten most actives and usually more than the next so many most actives combined, that cutting the float had to have some volume implications.

Has anyone done the math on what the reverse split in C has meant to the volume stats?

Thu, 06/09/2011 - 18:43 | 1356068 gianakt
gianakt's picture

Large US banks using QE2 money to short stocks. Only in America. God Bless America!!!

Thu, 06/09/2011 - 18:47 | 1356069 chump666
chump666's picture

Forget it, low volume trades, market is still trending lower.  You will NOT get those HFT meltups from 2010.  That was on the back of 'possible' liquidity flowing in from POMO, but not a hell of a lot of it did.  Hedge funds work on low liquidity as compared to invesment banks. 

It was a sucker rallying or bull-trap, damn Asia is slowing = America's lender not looking too healthy. 

major meltdwn timed it feels close.

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