Chronicling the Craziness in the Market
Last week and this week, we cited a host of issues.
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Note: I am taking Friday off. The next column will be Monday, Oct. 20.
While I know there is no timing to all the craziness we are currently seeing in the market, I feel the need to chronicle it.
Last week I cited a whole list of issues, namely the OpenAI announcements that move stocks as if we’re back to adding dot-com to the name of a stock and it soars.
This week I cited the ratio of the Russell 2000 (IWM) , which does not require its members to be profitable, the low-quality aspect of this market. I showed you the ratio of the IWM to the S&P SmallCap 600, which does require its members to be profitable. It almost changed course on Tuesday but on Wednesday it was right back at it, and notched another tick higher.
Today I will bring you something a bit more anecdotal because I do not have a chart to show it. But an outfit called Volatility Shares, which issues ETFs seems to think it is a good idea to issue 5x — yes, FIVE TIMES — leveraged long ETFs in individual stocks. Because you know, we’re clearly not doing enough with the three times ones.
The list includes all the usual suspects, such as Advanced Micro Devices (AMD) , Amazon (AMZN) , Google (GOOGL) and Nvidia (NVDA) . But it also includes bitcoin, ether and solana from the crypto area. Of note — perhaps I missed it — but I did not see Meta (META) on the list. Has Meta’s decline nixed it from the fan faves? Apple is not on the list I saw either.
In any event I feel compelled to further note that in late 2008, well after the Lehman collapse and the bank debacles, including the "no financial shorts" proclamation, well after the S&P had pretty much halved, some outfit came out with a 3x levered short XLF (financials). The market bottomed in March 2009.
In other words, there may be no exact timing to this, but these are not the sorts of things we see at market lows.
As for the indicators, not much changed once again on Wednesday. Breadth has improved in the past few days but not yet good enough to change the indicators.
I did notice, however, that Nasdaq’s volume finally increased. Nasdaq has not had two consecutive up days since the first two days of October, so nearly two weeks.
On Monday I noted that volume slipped under 10 billion shares for the first time all month, and despite my view that perhaps it was the Monday bank holiday that might have kept it subdued, it stayed under 10 billion shares again on Tuesday.
Wednesday, though, the speculators were back in force with Nasdaq volume pushing to 11.5 billion shares. I point this out because the put/call ratio came back down to .78, and over on the ISE the call/put ratio for equities only surged to just shy of 3.0. It ticked just over 3.0 on Oct. 8, two days before the swoon.
I guess folks are feeling more comfy again.
One final note: The Daily Sentiment Index for gold and silver did not change. It remains at 87!
