Monday, August 22, 2016

The Seven Year Fake Rally

"They traded worthless pieces of paper back and forth for seven years straight while the global economy imploded in real-time..."

ZH: August 22nd, 2016
Complete Chaos In Equity Markets
One trader described the swings in stocks as "complete chaos" saying that machines were clearly in charge..."There's no humans playing anymore." 

Barron's August 20th, 2016
Second Longest Rally In U.S. History On No Volume
"This current month has experienced particularly weak volumes, even for a period that is traditionally the quietest of the year."

Activity is a market factor that gets a lot of attention from technicians. A central tenet among them is that volume should confirm price, so that if a market rallies then volume should expand with it.

During this bull market, daily volume in the SPY ETF was below its 50-day moving average 60% of the time. In other words, the entire bull market has been “low volume,”

Who benefits from this charade?

Skynet aka. NYSE and HFT

Who loses? Active management:
aka. Anyone who owns individual stocks versus S&P 500...

Who gets out when Oil, yield, JPY, CNY, mega caps, ETFs, junk bonds, FANG, IPOs, Emerging Markets, Europe, Japan, Energy, Retail, Transports, Financials all trade as one to the downside?

No one

Total market volume:

Volume moving averages:

Breadth momentum

Price momentum

NYSE highs - lows: