Breadth and Volume, improving but . . .
We saw a nice increase in both breadth and volume yesterday. NYSE volume was 1.6B, and the only hair on the day was Nasdaq volume. Oracle -- a stock I mentioned liking on a few shows this summer -- was nearly 20% of the Nasdaq total volume.
Given the good numbers from ORCL, I guess we shouldn't be surprised at them trading at 5 to 10X normal volume; But without ORCL, the Nasdaq would have traded less than a billion shares Wednesday -- thats hardly all that impressive.
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ORACLE 6 month chart
click for larger chart
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No matter, the march towards the May highs continues . . .
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Thursday, September 21, 2006 | 09:00 AM | Permalink
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Interesting concept Barry - volume (ex-software volume). We're surely at the top - right? Or near the top?
Posted by: Ollie | Sep 21, 2006 9:12:02 AM
there's always a "but"... ;>)
very interesting considering it was a Fed day
Posted by: emd | Sep 21, 2006 9:23:00 AM
Silence!
Batman is on.
Posted by: Hammy | Sep 21, 2006 10:44:08 AM
Forget about inflation, it's the other thing we need to start worrying about. See Mr. Weldon on deflation.
http://www.minyanville.com/articles/index.php?a=11253
Posted by: lurker | Sep 21, 2006 10:44:18 AM
Barry: This is off subject but what do you think about Investool buying Think or Swim, this is cause for deep concern, no way this is going to work!!!
Posted by: MASH | Sep 21, 2006 10:51:05 AM
Just out of curiosity, where do you get your 1.6b? I get 1.3b from bberg (NYSEVOL Index). I don't think they count ADRs or cross2
Posted by: JoshK | Sep 21, 2006 11:11:17 AM
now is the time to buy puts.
Posted by: sam | Sep 21, 2006 12:10:08 PM
We can talk technicals all we want, but the market just keeps going up............
These buts....are killing my account.
Posted by: BigBill | Sep 21, 2006 12:11:01 PM
A lot of money is rushing into bonds lately.
Posted by: Craig H | Sep 21, 2006 12:34:21 PM
http://www.phil.frb.org/files/bos/bos0906.html
Kaboom! Look out below!
Philly Fed Survey
Posted by: Mark | Sep 21, 2006 12:55:02 PM
sam is correct (a day late). I shorted the IWMs and RTHs into yesterdays rally. I'm now 50% cash and 50% short. First time all year that I have no long exposure.
Posted by: S | Sep 21, 2006 12:57:14 PM
Philly Fed Index lowest and negative since Apr/May of 2003.
Now wasn't that around when our economy/market bottomed?
This time around, it seems we're more teetering at the top of the economic cycle. And we're already getting such poor numbers?
My sense of air pocket in the economy and market has just ticked up a notch.
If this news is ignored and we go on to new highs, I guess we are pretty much in insane rally mode.
Posted by: Michael C. | Sep 21, 2006 1:00:05 PM
Very mixed message on bonds from what I can see. The hot-money betting including some big wagers (probably from hedge funds) seems to be on either a recession or a Fed rate cut in the very near future (or both) -- net long interest in 10-year T-bond futures is as high as I've ever seen it -- but OTOH the commercial houses appear to be net short the 10-year and long the 2-year. I'm not reading too much into that one way or the other right now -- I tried tracking the commercials using COT data for some years with little success -- so will only comment that any easy money made on the long side has probably already been made. JMO
I remain net-long in the markets generally but am fairly strongly hedged and holding more cash than usual. No predictions; it's just a matter of risk vs. reward and risk to the downside still looks much larger than upside, at least to me. FWIW
Posted by: RW | Sep 21, 2006 1:07:42 PM
How can there be a net position in a futures market? I thought every transaction involved one side buying and one side selling. Which means the net position should always be neutral. If one group has a net long position, some other group has to have a net short position. What groups are you ignoring when you claim that there is an unusually high net long position?
Posted by: jkw | Sep 21, 2006 1:13:31 PM
jkw,
The overall futures market is always balanced, but any class of investors within the market (e.g., large speculators, small speculators, commercial hedgers) can have a net position.
Posted by: anon | Sep 21, 2006 1:19:27 PM
This is the most informative part of the Philly Fed release:
"Indicators for general activity, new orders, and shipments fell substantially from their readings in August and suggest no growth this month......The region's manufacturing executives were significantly less optimistic about future activity, with most indicators dipping to their lowest readings in six years."
Posted by: Jason | Sep 21, 2006 1:42:53 PM
jkw, I see anon answered so I'll only add that as far as I can tell (judging by CFTC figures I've seen) the 'speculators,' large and small, are pretty much on one side and the commercials are on the other in the treasury market right now.
There have been comments in previous threads that appear to assume the commercials are 'smarter' and therefore this means the yield curve will steepen (ergo no recession and a resumption of a bull market) but differences between the classes of investors WRT time-frame, hedging strategy, portfolio construction, purpose, etc. make this interpretation highly speculative IMHO hence my comment.
Posted by: RW | Sep 21, 2006 1:51:25 PM
Oracle does make a good database.
The number of folks predicting a Sept-Oct correction is huge. I've recently joined that camp, too. But can't ignore how nice this move up from the summer correction lows has been. It's trended up despite the headwinds from those ridiculing the economy, scared about the Middle East, worried about the Fed, etc.
Always good to be aware of the bull AND bear arguments. IMHO, anyways.
Posted by: muckdog | Sep 21, 2006 1:52:55 PM
damn, I forgot to tell you guys I was buying DIA calls this morning which was a surefire way to put the coitus on the market. Sorry, you could have made a boatload of money if I had been more thoughtful and let you know what I was getting ready to do!
Actually, my strategy is to get my SPY puts green by buying more and more cheap QQQQ and DIA calls since there is a strong negative correlation between me making a decision and seeing any money from it. I wonder if I could actually crash the market all by myself using only meager resources other than a lot of bad juju? It's a tempting thought.:)
Posted by: whipsaw | Sep 21, 2006 3:19:15 PM
Just my humble opinion, but it takes a special kind of risk-loving moron to be buying the oil ETF today. "Slowing economy? No hurricanes? Who cares, just buy oil, it's worked for three straight years, it has to work again!"
Posted by: Ollie | Sep 21, 2006 3:35:55 PM
This was a top that had resistance written all over it. Even from last August:
http://members.cox.net/miranda/nas17Aug2006.gif
Posted by: Jack | Sep 21, 2006 4:20:11 PM
It's not just the Pilly Fed. It's a bunch of stuff.
Reduced guidance out of YHOO due to lower ad spending was validated by traditional media company Dow Jones, who also lowered guidance due to reduced ad spending. Why are companies cutting back on ad spending? Maybe they are cutting expenses to try and make 3Q numbers? Not sure but it seems plausible.
In tech, KOMG, MXIM, and SLAB have joined YHOO in lowering guidance. And everyone knows about the weakness in housing and autos.
And the freefall in commodities is scary. Does it reflect lower demand? or expectations for lower demand? And what about everyone piling into treasurys regardless of yield? What is that signalling? And what about the huge miss on the housing start number earlier in the week that the market shrugged off?
And the geopolitical issues are too numerous to list: Thailand. Rioting in Hungary. Is Iceland about to blow up after raising rates to 14%? And how endearing for Chavez to call Bush the Devil while on American soil. That's got to be good for trade. Same thing with Russia putting the wood to Shell.
I'm happy to be short for a while.
Posted by: S | Sep 21, 2006 4:24:57 PM
