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Market strength on troubling volume.


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#1 Rogerdodger

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Posted 21 January 2023 - 02:17 PM

Mike Burk's seasonality for the coming week. (in the 3rd Presidential Year)
https://talkmarkets....023?post=382471
 

The good news is:  Seasonality for next week is very strong.
Average returns for the coming week have been positive by all measures
The Negatives: Total volume continues to fall.
Conclusion: The unresponsiveness of new highs to Friday’s strong rally is troubling.

 

Declining volume vs rising price looks a bit similar to the declining volume/vs price seen in last August-September's price decline.
Weak-volume-rally.jpg
But August usually has low volume (Mike's stats for Aug 2022 accurately predicted end of August stock weakness)

Then there was this from Stock Trader's Almanac
  "One of the historical realities of the stock market is that it typically has performed poorest during the month of September."

 

So maybe an August/September Volume comparison, is not too predictive of the current market action, where stocks are rising but on declining volume since October?

And now we have "The January Effect"... or do we?:
"The January Effect is a perceived seasonal increase in stock prices
Indeed, our own look back at the SPDR S&P 500 ETF (SPY) since its 1993 inception makes one wonder how the term ever came to be used. Of the 30 years since 1993, there have been 17 winning January months (57%) and 13 losing January months (43%), making the odds of a gain only slightly higher than the flip of a coin.
"Traders should be aware of the tenuous nature of the January Effect.

Instead focus on the market conditions at the time."
https://www.investop...nuaryeffect.asp


Edited by Rogerdodger, 21 January 2023 - 04:59 PM.


#2 Rogerdodger

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Posted 21 January 2023 - 03:59 PM

Once burned, Twice shy?...Or Broke?

 

Investors are still not jumping into the market

There is a similar situation in GOLD.

 

Can gold's rally last as ETF investors continue to ignore the market?
Neils-Christensen.jpg
Neils Christensen Friday January 20, 2023 17:12
 

(Kitco News) - The new year is proving to be a solid start for the gold market as prices end the week near a nine-month high.

The gold market has rallied for five-straight weeks as prices are up more than 5% in the first month of 2023. And while there is strong bullish sentiment in the marketplace because, there is still one piece of the market missing.

Investors are still not jumping into the market, causing some analysts to question how sustainable this new rally is. While gold prices have rallied 5% this year, data from the world's largest gold-backed exchange-traded fund, SPDR Gold Shares (NYSE: GLD), shows that ETF demand continues to fall.

As of Jan. 19, GLD's gold holdings have dropped 5.21 tonnes. The question is: does the price follow broader investment demand, or will ETF purchases pick up to reflect the bullish sentiment in the marketplace? The outflows in the ETF market have slowed, but they haven't ended.


Edited by Rogerdodger, 21 January 2023 - 04:06 PM.


#3 Rogerdodger

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Posted 21 January 2023 - 04:34 PM

I wonder how many, young and old, are permanently out of the crazy markets that we have seen lately?

 

Now living on retirement and cash funds from selling their paid-off homes at crazy prices (with zero to little tax consequences) and bought nice, new at very low interest rates. Maybe older folks taking some, or all out of a very scary Covid-induced falling market.

Their grown children with college debt and crypto losses are living back with the old folks in the new, bigger home, living a life of luxury?

Now they are not slightly interested or motivated to "get a job."  Who would be?

 

I know a couple of these people. 40 year old "retired" attorneys sponging off of their parents.

They never mention Robinhood, Crypto, Tesla or Gamestop any more.

 

The average student borrower takes 20 years to pay off their student loan debt. Some professional graduates take over 45 years to repay student loans.Dec 16, 2021
How a decline in some Google searches shows retail investors are leaving the market

 

Retail Investors Are Dropping Out of the Stock Market | Barron's

 

Stock-Searches.jpg


Edited by Rogerdodger, 21 January 2023 - 04:55 PM.


#4 EntropyModel

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Posted 21 January 2023 - 05:55 PM

Thx for the charts & Info Roger.

 

If December 2022 is any guide, efficient markets have had there way with seasonality & 4 year cycle patterns - they tend

 to only work anyway in the direction of the bull or bear trend, because they require institutional program support.


Question everything, especially what you believe you know. The foundation of science is questioning the data, not trusting the data. I only trust fully falsified, non vested interest 'data', which is extremely rare in our world of paid framing narratives 'psy ops'. Market Comments https://markdavidson.substack.com/?utm_source=substack&utm_medium=email https://www.youtube.com/playlist?list=PLznkbTx_dpw_-Y9bBN3QR-tiNSsFsSojB

#5 pdx5

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Posted 22 January 2023 - 09:56 AM

Buying the dips in 2022 has worked well. Same MO for me in 2023. 


"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule

#6 skott

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Posted 23 January 2023 - 04:46 PM

not a bad strategy. If you look back at the real bear markets, 2000 and 2008, 1973-74 they have the most preponderance of 2% + up days. The worry for a short person though is how many can we have? DSI bullish sentiment of small traders is still pretty low. ughhh