Monday's Trading Volume Was Very Unusual
We've been talking a lot about volume in this column. But today was different.
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
While I know Monday felt like Groundhog Day, it was a little different, statistically speaking.
We all know I have been harping about Nasdaq’s volume, specifically all the speculation we’ve seen over there with the penny stocks, meme stocks, and such. It is rare to see Nasdaq’s net volume to be red these days. It has only occurred once in the last nine trading days. That’s almost two weeks where Nasdaq’s up volume was greater than down volume.
It’s quite rare for us to see it, even more than just the last two weeks. There have only been 22 days since April 8th when net volume has been negative. And consider most of those occurred in April.
But here’s something even rarer: net volume negative on a day Nasdaq is up on the day. And that is what happened Monday. Up volume for Nasdaq was a mere 35% on a day the Nasdaq Composite was up 70 points. We saw this on June 27th and on July 15th but in both cases, the up volume figure was 45% and 47% so it was negative but not by that much. Monday was a lot.
Let me add that while volume has been tailing off almost everywhere—last week the NYSE saw the lowest volume since June 6th one day, volume for Nasdaq has now clocked in over ten billion shares a day every day for the last six trading days. It has lifted the ten-day moving average of Nasdaq total volume to over ten billion shares, which means it has now surpassed where it was at the April low. We typically get high volume into declines as folks rush for the exits.
Now, some may say it got close in May and June. It did. But notice that in both those cases, Nasdaq had been correcting, either sideways or a quick whoosh. That has not been the case now.
In fact, take a look at the volume in the QQQs over the last week, a time when overall Nasdaq volume is surging, QQQ volume is tailing off, and hasn’t seen a day over 50 million shares in nearly two weeks.
With the S&P green for the last six days, it would surprise no one if we had a down day, but two of the last three trading days have seen breadth negative. I think it would be a good test for the market to see how soon buyers come in. I think it would be a good test for the market to see how individual stocks act into a decline.
We already saw last week how many stocks have gapped down on earnings despite beating their lowball numbers. Now it would be good to see if selling increases on a pullback or if it dries up.
