4 replies to this topic

[James Quillian]

Average daily volume is not much different that it was in 2002 As late as 2002 program trading volume was about 30% of NYSE volume. Lately it has been running over 70%. In 1999 ETF volume was 2% of the volume of the Russell 3000 components. Today ETF volume is 18% of Russell 3000 volume. I haven' t taken the time to do the math but it is easy to see that very little in the way of long term holdings have been liquidated. Margin debt spiked way up in June, which is the last available number. The potential for margin calls is huge. Very little stock has yet to be put on the market. James

[Rogerdodger]

Sweet dreams to you too! I was hoping the fear was worse than the reality, Now I wonder if the reality is worse than the fear.

[James Quillian]

Sweet dreams to you too!
I was hoping the fear was worse than the reality,
Now I wonder if the reality is worse than the fear.

All I can get if I am lucky is a little redemption and its a little late to get much of that.






One more thing. If we ever have a few days when the market declines on very low volume, that will be a very very bad sign.

The low volume has made the job of the Asset Enhancement Initiative folks easy.
If the market starts dropping on low voume, that means they have given up.

James

[kaiser soze]

There is a certain signature I have noticed when mutual funds sell. And it consists of volatility increasing intraday in advance of the selling. And that is because they buy puts enmasse first and then liquidate their holdings so that the very act of selling does not result in poor execution prices. So far volatility has been increasing coincidentally with selling. That is more indicative of hedging activity. So, I agree that mutual fund selling has not even started. Perhaps, they are not yet convinced that the trend has changed. Or perhaps they are waiting for a big short covering rally to unload their holdings. One of the really disturbing things is the low level of cash mutual funds have. Its been true for a longtime but the efect is more pronounced in a liquidity challenged environment such as this. Simply put, mutual funds cannot step up and defend the market even if they are constructive about it because they simply dont have the money to.

[traderpaul]

James, Please don't wake them.....It is like boiling a frog.....You turn up the heat up slowly......They are very comfortable at present.....Lower rate will be here soon.....Everything will be back to normal.....Just a pimple in an elephan's [bleeep].....