Monday, April 8, 2013

Stocks Advance on Lowest Volume of Year

Just in case you're one of those "converts" awaiting to Buy the Dip, you'd be best advised to do so before noon in US markets.

As has been the case for the last four+ years, stocks will simply not go down in any depreciable manner until Ben Bernanke and other central banks stop the presses printing endless amounts of cash on a regularly scheduled basis.

In the absence of any material news - or volume, for that matter - stocks nose-dived out of the gate, fell to the lows of the day around the lunch hour and then proceeded to levitate into the close, keeping alive the day-trading dream pattern of up-down-up-down through a thirteenth straight session.

That stocks rose was certainly not the story today. The headline belonged to volume, which, despite being seminally weak over the past two years, today was the lightest of 2013. That's really saying something, specifically, that this rally is nothing but vapor, because without solid volume, all rallies are entirely suspect and easily torn down.

With little invested at current levels, traders are cautious and will exit at the first signs of trouble. That line of thinking, of course is based upon years of data and research which probably doesn't apply to the current market, which is completely an apparition, a fraud, the manipulated product of excess liquidity in the system which has nowhere to go but into risk assets.

Based on the volume figures from the past six, twelve or 18 months, today's numbers indicate that not only are individual investors completely out of the market and not coming back, but even seasoned investors are fleeing from stocks in droves, leaving the algos and computers to trade against each other. Eventually, a system like this must fail, though predicting the date of such eventuality is a fool's game.

Trading in thin markets are likewise the work of rookies, speculators and pros, though nobody from any group can claim a level of expertise that would lead directly to profitable trades, except for extremely short term or hedged activity.

Today's volume figures are so horrifyingly low that one might suspect the end is near, though that end has been in the headlights for some time now and just like this market, continues to present itself as a mirage on the horizon.

A day will come when the skies clear and the end becomes tangible, touchable and irreversible. Those who have traded in honest markets in the past are patiently awaiting that day.

Dow 14,613.48, +48.23 (0.33%)
NASDAQ 3,222.25, +18.39 (0.57%)
S&P 500 1,563.07, +9.79 (0.63%)
NYSE Composite 9,046.87, +46.62 (0.52%)
NASDAQ Volume 1,294,793,750
NYSE Volume 2,927,141,000
Combined NYSE & NASDAQ Advance - Decline: 4180-2254
Combined NYSE & NASDAQ New highs - New lows: 244-44
WTI crude oil: 93.36, +0.66
Gold: 1,572.50, -3.40
Silver: 27.14, -0.082

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