Speculators Were Busy Monday
A choppy period has begun, and volume has dried up, except in this dark corner of the stock market.
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It feels as if Monday was the quietest day we’ve seen in weeks, right? Well, it felt that way to me. And then I looked at the volume totals. Mostly, the NYSE volume has been in the 4.5 billion share range except near Liberation Day and the ensuing days when it soared to over eight billion shares for several days.
So, at 4.2 billion shares traded on the NYSE, Monday was on the low end. Then I looked at Nasdaq, and my eyes popped. Nasdaq traded over ten billion shares on Monday. If that number is eye-popping to you, it’s because back in January and February, I kept highlighting numbers like that to you, saying how odd they were.
You might recall it was all these penny stocks that were trading billions of shares. But that nonsense went away as soon as the market started swooning. I am here to report that nonsense is back. On Monday, we had a Chinese Crypto stock that traded just shy of two billion shares. It closed the day at 18 cents. There was another penny stock that traded just over half a billion shares.
Should I take this as a sign that folks are back to being all bulled up? Not yet, but it is surely a sign that the speculators are no longer bearish.
In any event, Monday gave us the chop, but very little changed in the indicators. We are still overbought. You can see the tiny little downtick in the Overbought/Oversold Oscillator. With breadth having been positive for eight of the last ten trading days, I cannot tell you when we might be back to oversold. For now, it still looks to me as if we are going to see the chop-fest I envision. Oh sure, we’ll have an occasional day where the market is up nicely or down nicely, but mostly I think we’re in a sideways market for now.
I would highlight that breadth did well on Monday, and on the chart of the cumulative advance/decline line (blue line) you can see it is now at the equivalent of when the S&P was at 5800 (brown line). This is another reason I expect mostly sideways action for now.
What was so odd about Monday, though, was that the US Dollar moved down while the bonds moved up. Lately, if the buck is weak, then so are bonds and stocks. That’s a minor change and worth watching. I am still waiting for the Dollar Index to get back over 100, which it has failed to do. I don’t think that spike low at 98 breaks on this trip down, or if it does it will be a minor lower low before rallying again, but if the buck can’t get over 100 on the next rally I’ll get more concerned that it used up the chance to do so by going sideways.
I will be chatting with the folks at Ninja Traders Tuesday morning at 8:25 am if you’d like to tune in. https://www.youtube.com/live/IARlNi6ypuU
