There are an interesting article in the WSJ today reporting that on Monday SPY, the SPDR S&P 500 ETF, had its lowest trading volume in 11 years. 32 million shares changed hands, down from an average of about 80 million shares a day. Of necessity, that means that "sophisticated" investors sat out.
A second story noted that during 2017 the Dow has seen its lowest intraday price volatility in six years.
At one level, the lack of volatility kills value investors, who rely on volatility to offer up occasional irrational prices. At another, it raises the prospect that something is happening under the surface - the Big Money is moving toward the door? - that might cause a bit of turmoil in our portfolios.
David
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Yep, summer is here.
I am no technical expert. However, since the middle of July I am seeing in my charting of SPY the MFI (money flow index) has been in decline along with thinning volume since May. It also appears, that earnings are catching up with valuation as there has been a lot of consolidation taking place since mid July within the 500 Index along with it's breath being in decline as the number of stocks trading above their 200 day moving average has been moving down since April's peak of about 80% to currently 72%.
With this ... Perhaps, "Sell in May and come back after Labor Day" might to be the story. Anway, Labor day is now only weeks away. Also, I plan to buy a good dip as earnings and sales are improving along with expectations for 3Q17 & 4Q17 according to S&P. Thus far, the bark coming from North Korea is just that. And, there is alway going to be global conflict somewhere. Perhaps we should start shooting down a few of their missles as our government tells us they have this capacity should they launch towards the US or it's territories and/or allies. I'm thinking that the best course of action still remains through the UN and its security council. After all China and Russia voted along with us and many others for tougher scantions against North Korea. With this they want to derail the recovery of the Global economy and the best way to do this is to start and maintain hostilities with us and others.
Back at the first of the year my call was that the S&P 500 Index would reach 2475 (or thereabouts) sometime in 2017. Recently, it made 2480+. So, perhaps it is a little ahead of itself at this point in time. In addition, August historically is a down month for stocks. Old_Skeet's market barometer closed August 4th with a reading of 146 which is up 3 points from its July close putiing it just barely in fairvaue territory on the barometer's scale. Generally, a higher barometer reading indicates there is more investment value in the 500 Index over a lower barometer reading. I'm wanting to see a reading of close to 160 before I get excited about doing any equity buying. Perhaps, @Tony will provide us his take for the Index via the Elder Impluse System?
One might want to read what Jeffrey Saut of Raymond James is thinking. To read, Google ... Jeffrey Saut Commentary.
Skeet
- Closing daily prices have been in a trading range.
- Almost all of the Elder Impulse System price bars have been blue, neither a decisive green or red.
- The 10-day EMA has been in a weak uptrend and is flattening.
SPY's Stock Charts Technical Rank is 64.4. I'm more interested in the few ETFs with SCTRs between 97 and 99.9.
Not sophisticated. But I am one who "rides" the market up and down, adding a bit of risk or taking a bit off the table depending which way the major averages are moving.
But 3-4 months ago I reached the upper limit of how much I'm willing to commit to cash and short-term stuff. Can't ever recall that happening before (except maybe during the '98-'99 period). The exact percentage isn't important. Point is - I reached the predetermined max, and so here "in my prison cell I sit" (with apologies to Kurt Vonnegut). Sounds like a whole lot of others are doing the same from those low trading/volatility numbers.
Just (an uneducated) guess - but we may have entered the insane zone of valuation of many assets.