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The Incredible Lightness Of Buy-Side Volume

Tyler Durden's picture


Today's market movement was/is remarkable in its clarity. One glance at this chart and it will become brutally clear that once 1340 was hit, the 'tickle-algo' was triggered and a de minimus volume press on the bid-offer stack limped us all the way back to the day's highs - considerably above VWAP. Whether we see the institutional selling blocks hit now is still undecided but if there was ever any doubt about who is selling and who is buying this chart should clarify...

lower pane is volume (spot the difference) and the light blue line is VWAP - notice that even as ES ripped to the day's highs, it was unable to push VWAP higher...


Chart: Bloomberg


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Tue, 07/17/2012 - 12:49 | 2624693 transaccountin
transaccountin's picture

how can /es go up on 1/4 the volume? i mean it takes 10 volume to go down but only 3 to go up as much?

Tue, 07/17/2012 - 12:52 | 2624710 firstdivision
firstdivision's picture

Cause the system is rigged to the upside.

Tue, 07/17/2012 - 12:55 | 2624725 Racer
Racer's picture

Only when They want it to go up. They will push it down if there are a lot of stops they want to hit before they turn it around

Tue, 07/17/2012 - 13:09 | 2624785 Precious
Precious's picture

... the old Billy Preston song, "Nothin from nothin leaves nothin."

Tue, 07/17/2012 - 13:25 | 2624874 Jason T
Jason T's picture

classic.. I wasn't even born yet

Tue, 07/17/2012 - 13:44 | 2624951 Precious
Precious's picture

beautiful ...

Tue, 07/17/2012 - 13:13 | 2624792 BlandJoe24
BlandJoe24's picture

Yes, "they" have way more than enough money to buy any market move they want.  So if they'll net profit from a move up or a move down or holding steady, they'll spend some money to make it happen.  

"They" have enough money to place bets, sell bets, AND move the market.  

Overwhelmingly rigged to provide more and more and more profit to a few people and wipe out everyone else....


Tue, 07/17/2012 - 13:40 | 2624930 0z
0z's picture

Well then, just trade with them and make tons of money too! Ahahah! People who blame their trading losses on the illuminati!

Tue, 07/17/2012 - 14:46 | 2625185 leftcoastfool
leftcoastfool's picture

I would, but they never send me the memos before they rip the market...

Tue, 07/17/2012 - 14:51 | 2625205 0z
0z's picture

Ahahah! I hear ya!

Perhaps this has nothing to do with some Illuminati Grandmaster of Evil, and more to do with shortsellers levered 40 to 1. Ahahah!

Tue, 07/17/2012 - 14:48 | 2625196 0z
0z's picture

Funy how Zerohedge reader do not like my suggestion of making money. God forbig they have more dollars to purchase more real assets before a systemic monetary collapse happens! Ahahah! You guys make me crack everytime. At least a couple of them agreed with me on making money.

Blaming someone else for your bad luck is always a losing attitude. If you're still firm in your conviction, you all should only be glad you can add to your positions at this price! Or sell calls, whatever is is you like to do.

Tue, 07/17/2012 - 18:50 | 2626251 rocker
rocker's picture


Tue, 07/17/2012 - 15:49 | 2625539 The Monkey
The Monkey's picture

It's pretty easy for the bulls to put momentum behind the market, until, well, it isn't.

Let the bulls continue to do the heavy lifting for you.

Tue, 07/17/2012 - 12:56 | 2624731 The Monkey
The Monkey's picture

IF nosellers

THEN marketmovesup()

Tue, 07/17/2012 - 13:08 | 2624794 Precious
Precious's picture

Shit.  You can't even trust Ponzi schemes anymore.

Tue, 07/17/2012 - 13:28 | 2624892 Widowmaker
Widowmaker's picture

It's worse.

It's capital dislocation from savers and risk averse to the incorporated in the name of "growth."  It's name only and rigged is far too kind a phrase to describe.

Tue, 07/17/2012 - 14:35 | 2625134 PeeramidIdeologies
PeeramidIdeologies's picture

More like in the name of illusion. Globally the fed must appear in control of the market, as must everyone's CB. Loss of control is loss of confidence. That is the key these days. It become a giant game poker game where everyone is bluffing so nobody can call...

Tue, 07/17/2012 - 12:52 | 2624711 Racer
Racer's picture

The banksters 'allow' it to go up by not standing in the way

Tue, 07/17/2012 - 13:01 | 2624761 Stoploss
Stoploss's picture

The Bernanke speech algo.


It will revert.

Tue, 07/17/2012 - 13:09 | 2624803 TheGameIsRigged
TheGameIsRigged's picture

This insane rigged market is really really annoying....i wish something REAL would happen

Tue, 07/17/2012 - 13:30 | 2624896 The Monkey
The Monkey's picture

Market moved up on powerful earnings growth. The Fed augmented gains by keeping deflation at bay and reducing volatility.

Not a rigged market at all.

Tue, 07/17/2012 - 14:11 | 2625056 adr
adr's picture

powerful earnings growth that would have came inunder estimates published a week ago. Lowering the hurdle doesn't mean you did anything spectacular to clear it.

Tue, 07/17/2012 - 14:49 | 2625201 leftcoastfool
leftcoastfool's picture

Robo Trader - did you change your screen name to "The Monkey"?

Tue, 07/17/2012 - 15:04 | 2625264 Hedgetard55
Hedgetard55's picture

Just a further refinmement on the software version of MDB and "Max Fisher".

Tue, 07/17/2012 - 15:27 | 2625386 The Monkey
The Monkey's picture

I didn't say the fabulous earnings growth would continue; I just said the market moved higher on a positive rate of change for earnings. This is a great set-up for a top, because the earnings story is behind us.

That said, let the bulls do the work for you. With Apple up next, and insiders closed out of the market due to earnings, prices will move higher.

Long until 1390, then start dollar cost averaging shorts expecting it to crawl to 1421. Keep lots of dry powder.

Tue, 07/17/2012 - 13:42 | 2624944 0z
0z's picture

Sell it then! The sell side is tougher; inflation!

Tue, 07/17/2012 - 12:51 | 2624703 radicall
radicall's picture

I was noticing the same thing. I guess there are no other sellers (except me) and a lot of the shorts covered down below yesterday's low

Tue, 07/17/2012 - 12:51 | 2624706 Snakeeyes
Snakeeyes's picture

My should there be volume? Bernanke gave a blah speech where nothing was revealed. Markets reacted negaitively then rebounded.

It should be "On Bernanke's Incredible Lightness of Being ... Fed Chair."

Tue, 07/17/2012 - 12:52 | 2624712 alien-IQ
alien-IQ's picture

The term "Free Market" deserves a place in the comedy Hall of Fame.

Tue, 07/17/2012 - 12:52 | 2624714 Deep79
Deep79's picture

Don't worry about short term noise.

We all know the end result, market is trying to shake as many shorts as it can and sucker in some longs in the process before it rips down. 

Market is their to hurt the most amount of people, if you believe we are ina recovory, by all means go long, but most know we are in BIG trouble. 

Stay patient, they csnt keep this sucker up too much longer.

Tue, 07/17/2012 - 13:14 | 2624824 Village Smithy
Village Smithy's picture

It's tough. I keep telling myself that the reason it's so hard to stay short is because the banksters want the short positions for themselves. But it's painful.

Tue, 07/17/2012 - 13:43 | 2624948 The Monkey
The Monkey's picture

Shorting is usually futile unless short interest has been completely purged, the market has had 5 too many drinks and headline sentiment is manic bullish.

We still have tons of shorts in this market. They need to be wiped out for prices to move down decisively again. Until then, lot's of fakes until it rips higher taking out the short interest. Probably on new Chinese stimulus and a big Asian rally. The IMF has asked for it.

A good exercise: pair your position to the maximum size that will allow you to still sleep. Hold your short steadfast through the buying capitulation (whatever level that is).

You may come out ahead or behind in the end, but you will benefit from having experienced all the mental stages of a drawdown.

Tue, 07/17/2012 - 13:44 | 2624954 0z
0z's picture

Agreed. Sell even more now!!

Tue, 07/17/2012 - 12:53 | 2624717 MsCreant
MsCreant's picture

Un"bear"able it is!

Tue, 07/17/2012 - 13:02 | 2624765 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Clever girl

Tue, 07/17/2012 - 12:54 | 2624719 mrktwtch2
mrktwtch2's picture

one thing for sure is that you could go broke trying to short this..

Tue, 07/17/2012 - 13:24 | 2624867 Waterfallsparkles
Waterfallsparkles's picture

Never short a dull low volume Market.

Volume will pick up with earnings of some of the Bell Weather stocks.

Tue, 07/17/2012 - 12:56 | 2624724 radicall
radicall's picture

Last night's rally was about China and US possibly doing stimulue. Copper has been denying the China story. SO is ES up on Earnings optimism or do people *really* think Bernanke is ready to blow his wad right now?

Tue, 07/17/2012 - 13:15 | 2624831 jay28elle
jay28elle's picture

All they are looking for is at least a hint that he might be thinking about possibly blowing his wad.

Tue, 07/17/2012 - 16:39 | 2625792 hedgehog9999
hedgehog9999's picture

The only thing he'll blow is Obama's.... watch copper as somebody else said in this thread......

Tue, 07/17/2012 - 12:56 | 2624732 GernB
GernB's picture

Another interpertation (or maybe the same one) is that once the market exahsted the supply of sellers volume plunged and the market rose because fewer sellers were left to push the market down.

Tue, 07/17/2012 - 13:43 | 2624934 firstdivision
firstdivision's picture

I'd love to see the demand side of the curve as the market follows no rational function.  VWAP is a mathmatical function to try to determine price, and as you can see, price does what it wants regardless of volume.

Tue, 07/17/2012 - 12:56 | 2624734 BudFox2012
BudFox2012's picture

I'm trying to decide whether I should be going long on software developers that make trading algos, or manufacturers of drones.  Which has more upside long term?  They both are very attractive investments right now...

Tue, 07/17/2012 - 13:10 | 2624802 MsCreant
MsCreant's picture

Software developers that make trading algos for drones. 

Allow your mind to freely associate with my suggestion.


Tue, 07/17/2012 - 13:37 | 2624917 sosoome
sosoome's picture

drones are getting ready to take off

Tue, 07/17/2012 - 13:10 | 2624807 crawldaddy
crawldaddy's picture

please wall street algos are little more than these.


 a fucking drinking bird and a keyboard.  Buy....

Tue, 07/17/2012 - 13:03 | 2624746 Cult_of_Reason
Cult_of_Reason's picture

Traxis to liquidate Biggs fund -- equity supply is on its way.

Who will absorb Traxis supply at current inflated stock price levels and long-only-fund bozos fully invested?

Tue, 07/17/2012 - 13:00 | 2624760 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Great title for an article, Tyler.

Tue, 07/17/2012 - 13:02 | 2624766 Chippewa Partners
Chippewa Partners's picture

BudFox,  Ask BLUE HORSHOE and get back to us.

Tue, 07/17/2012 - 13:06 | 2624767 Waterfallsparkles
Waterfallsparkles's picture

When in doubt, stay out.  That is my motto.

I usually day trade but right now with earning of IBM, Goog, Aapl comming up in the next few days, I am staying on the side lines.

I feel like I am losing out on some profits but do not want to get stuck in a Stock ahead of earnings where I could lose a substancial amount of Money if I am on the wrong side of the trade.

I have done well this year and do not want to lose one penny of my profit.

Tue, 07/17/2012 - 13:27 | 2624882 GernB
GernB's picture

Good idea. And much better than my strategy. I decided to make a very small bet that the market would rally on Bernanke's testimony. That did not work out so wall since I stopped out, and clearly illustrates why you have to have a system and be disciplned abouot sticking to it. It's when you start second guessing the market that you loose.

You may even know something about the earning of IBM Google and Apple, and be tempted to trade on it, but, it's not earnings that matters, it's how much of the earnings are already baked into the market.

Tue, 07/17/2012 - 13:41 | 2624939 Waterfallsparkles
Waterfallsparkles's picture

It has nothing to do with if earnings are good or bad.  The only think that matters is if they beat the "Wall Street ESTIMATES".  It depends on if Wall Street wants to pump or dump that particular stock.

I do not use stops.  Although, I do watch it all day.  Even if the price goes below were I would have had a stop, given time it will always come back for me to get out even or for a small profit.

The other thing is that Stops do not work on earnings when a Stock reports before or after Market.  The stop will only get you out at the Market opening price, which could be substancially higher or lower than your stop.

Tue, 07/17/2012 - 14:33 | 2625090 earleflorida
earleflorida's picture

IP = Nokia [last leg], Ericsson [crippled], IDCC [expensive], Rimm [going bust]

ZTE needs IP -- losing badly to APPL

HTC needs help from China, period!

Samsung needs IP -- the more the merrier (QCOM's evolution began and thrived in S. Korea)

APPL lives off the iPhone, but not for long as affordability becomes a strong driver in a weak global economy

*Sure APPL will beat, but...


Tue, 07/17/2012 - 13:04 | 2624777 SheepDog-One
SheepDog-One's picture

Economy dead in the water....yet stocks hover around a few% of all time highs....its all that matters! STAWKS!

Tue, 07/17/2012 - 13:53 | 2624984 Squid Vicious
Squid Vicious's picture

cue Momo-tarder bullish commentary in 3...2...1...

Tue, 07/17/2012 - 13:07 | 2624787 MountainMan
MountainMan's picture

15 min ES inverse h&s in place. We're going higher, bitchez.

Tue, 07/17/2012 - 13:24 | 2624865 Jake88
Jake88's picture

that is only an inverse h&s in your dreams. this bitches thing makes you guys all sound like a bunch of homos.

Tue, 07/17/2012 - 13:33 | 2624909 MountainMan
MountainMan's picture

Come on, just buy.

Tue, 07/17/2012 - 13:07 | 2624791 crawldaddy
crawldaddy's picture

The game is rigged and you and me are not in on it.  That makes us the mark.  Stay awhile from this crap, why bother gambling in a rigged casino.

Tue, 07/17/2012 - 13:14 | 2624825 ArkansasAngie
ArkansasAngie's picture

I'd rather go to a casino.  There you get free drinks and there's bells that go off if you guess right.  And ... besides ... There are fewer crooks running a casino than Wall Street

Tue, 07/17/2012 - 13:17 | 2624836 Winston Churchill
Winston Churchill's picture

But I've got a hot tip.

The South Sea Tulip Co.

Should I go all in ?

Tue, 07/17/2012 - 13:46 | 2624959 Tippoo Sultan
Tippoo Sultan's picture

Nay, Winston. LAND is the current investment opportunity of our lifetimes. As a Principal in the Mississippi Company, may I interest you in some fine French colonial land in Louisiana ?

Tue, 07/17/2012 - 13:13 | 2624816 Hman
Hman's picture

Short Squeez .. bitchez

Tue, 07/17/2012 - 13:14 | 2624823 MountainMan
MountainMan's picture

ES 1357 + and we fly!

Tue, 07/17/2012 - 13:14 | 2624826 Dan Conway
Dan Conway's picture

This is like waiting for monthly retail and auto sales data.  You know deep inside that sales are probably propped up by some unseen force (govt spending/govt fudging the numbers) but magically every month the spinsters will start ringing the bell for any modest increase.  I now believe that all data is now fudged (share price and volume included).  Look at LIBOR and everyone "in the know" knew about it.  Most people on this site suspected it.  It is a shame when suspicion becomes reality and YAWN!

Tue, 07/17/2012 - 13:19 | 2624845 Doublescythe
Doublescythe's picture

Nothing will get done politically until we see a 1,500 pt move on the Dow.

No volume until end of August.

Once momo's return, algos go full blast, market drops, credit locks, politicos have to act (too late).

Europe goes tachycardia, market drops another 1,000 pts.

You know how the rest of this story goes.

That's why I'm buying gold, diamonds, dry foodstuffs, water, and guns.


Tue, 07/17/2012 - 14:08 | 2625047 Hype Alert
Hype Alert's picture

I don't know, look at the week of 7/25/2011.  Something happened there.

Tue, 07/17/2012 - 13:23 | 2624858 MountainMan
MountainMan's picture

Get long bitchez.

Tue, 07/17/2012 - 13:23 | 2624862 nobusiness
nobusiness's picture

You cannot short this market......

Tue, 07/17/2012 - 13:26 | 2624881 Jake88
Jake88's picture


Tue, 07/17/2012 - 13:30 | 2624900 GernB
GernB's picture

It's the instane logic of rigged markets. Participants start betting on what the manipulators (the Fed) will do.

Tue, 07/17/2012 - 13:48 | 2624967 Jim in MN
Jim in MN's picture



Long goat intestines.

Tue, 07/17/2012 - 13:25 | 2624876 Meesohaawnee
Meesohaawnee's picture

or better yet algo nested IF

If = no sellers ramp on no volume,
    If  large vol sellers (ie 6/28 6/29) call Brian Sack with nuclear tipped ES buy   
        nuke shortsellers and declare no market pad hedgie bonus pool collect campaign contributions

Tue, 07/17/2012 - 13:25 | 2624878 MountainMan
MountainMan's picture

Massive, buy

Tue, 07/17/2012 - 13:26 | 2624883 sabra1
sabra1's picture

once all the soon to be in hell bastards own all the debts, they will crash the markets to deep dark levels, where they will buy all, for pennies on the dollar! thereafter, they will announce a new fairer market for all! count on it!

Tue, 07/17/2012 - 13:34 | 2624904 Boilermaker
Boilermaker's picture

I'm sure the 401(k)'ers and the general ignorant public will really oppose this.  Of course it's garbage.  But, it's touchy-feely-velvet-comfy garbage.

This isn't going to stop.  Ever again.

10 I hear 20...what about 30.  Hell, what about 40?

What an absolute show of strength and utter control.  Illegal, yes.  Fraud, yes.  Corrupt, absolutely.

Tue, 07/17/2012 - 13:38 | 2624924 I Am Not a Copp...
I Am Not a Copper Top's picture

Now we are at FULL RETARD

Tue, 07/17/2012 - 13:42 | 2624943 MountainMan
MountainMan's picture

ES 1366 Target

Tue, 07/17/2012 - 13:48 | 2624970 firstdivision
firstdivision's picture

Hope you're holding all your funds in TNA overnight.

Tue, 07/17/2012 - 13:47 | 2624961 Jim in MN
Jim in MN's picture



What part of "zero real returns across all paper asset classes for the next decade" don't you understand?


This is like taking a microscope to a dead, rotting cat carcass.  Watching the maggots feed doesn't make it a live cat.

Tue, 07/17/2012 - 13:48 | 2624968 Boilermaker
Boilermaker's picture

Looky at the REITS...

IYR now busting over $66.  Man, you've got to be joking.

Tue, 07/17/2012 - 13:52 | 2624980 MountainMan
MountainMan's picture

Considering the state of the "markets", you would be best served by reducing your long term horizon to a few hours at best.

Tue, 07/17/2012 - 14:16 | 2625068 ATG
ATG's picture

Good tell TD/ZH.

Thus we took +64% profits on SPY July calls

and are accumulating DIA August puts: 

Tue, 07/17/2012 - 14:20 | 2625079 hangemhigh77
hangemhigh77's picture

look at the bankster stocks, they tell the real story, most are red. The rest is just BS.

Tue, 07/17/2012 - 14:21 | 2625081 hangemhigh77
hangemhigh77's picture

Watch aapl, when it drops it will take the market with it


Tue, 07/17/2012 - 14:38 | 2625146 Doublescythe
Doublescythe's picture

I've got a deep ITM buy/write on AAPL - fingers crossed it shits the bed, but these guys have a habit of crushing estimates time and time again.

Tue, 07/17/2012 - 15:07 | 2625276 geewhiz190
geewhiz190's picture

uncharted waters with central bank influences.  creating huge divergences between sectors within the market. consumer staples eg. KMB, CL, WMT are parabolic or nearly so. Industrials and commodity names and financials can't move. 

Tue, 07/17/2012 - 15:09 | 2625284 Bastiat009
Bastiat009's picture

Will stocks massively outperform gold again today?

Bring on the red arrows .. you guys amuse me. :-)

Tue, 07/17/2012 - 15:25 | 2625377 orangegeek
orangegeek's picture

SP500 still has more upside after today according to elliott wave.  When at the end of wave 2, volume should be almost non existent.

Tue, 07/17/2012 - 15:29 | 2625402 haskelslocal
haskelslocal's picture

 "if there was ever any doubt about who is selling and who is buying this chart should clarify..."

What's the deal with all these posts that leave the answer a mystery with assumption that everyone knows what's being talked about?

I guarantee 75% of the readers have NO IDEA how that chart describes who is buying and who is selling.


Tue, 07/17/2012 - 16:01 | 2625608 tawse57
tawse57's picture

I am glad that you just posted this because I was about to put my hand up and say "Please sir, I haven't a clue what this means!"

Have to say it Tyler, but your articles are increasingly only understandable by people who work on Wall Street or in The City, or who are regular traders... there must be plenty of enthusiastic market watchers, like myself, who come here seeking info on how the markets are being allegedly manipulated, etc, but who can't understand what many of the articles mean.

The way I read this is that volume of shares traded is now incredibly low but, despite this, the market is not only NOT crashing, it is remaining high and going up. In other words, it is rigged and appears, allegedly, designed to lure in suckers like Joe Doe Public such as myself?

Tue, 07/17/2012 - 17:01 | 2625891 atoast2toast
atoast2toast's picture

Dont get too hung up on the vwap 


Over the last 90 days the vwap closed at an average of -.01 from the mid price for the day





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