My pal Kevin Lane focuses on the volume during last Friday’s sell off (and I agree):
>
Thanks, Kev.
Sell Off on Volume
January 27, 2006 1:22pm by Barry Ritholtz
This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment. The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client. References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. The Compound Media, Inc., an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers Please see disclosures here: https://ritholtzwealth.com/blog-disclosures/
What's been said:
Discussions found on the web:Posted Under
Previous Post
Technicals versus Economics
Volume is tricky, though. Check out April 15th’s selloff, same type of action, but led to big rally instead of end of bull market. In fact, all three days that exhibited the same type of sell volume in the Spiders since the beginning of the bull market in October 2002 were at market bottoms. Just a caveat. It is obviously still something to keep an eye on.
PLEASE DON’T PUT ME IN THE “VOLUME DOESN’T MATTER” CAMP, THOUGH!
I believe the action after a high volume sell-off is just as important.
The more the price is retraced I’ve observed, the less “meaningful” is the high volume move.
So far we have a pretty good retracement going on. To me that indicates that while the sell-off should be respected, it should also be taken with a grain of salt.
Good point Michael. Last Fri’s drop did not rattle the markets as we have had a nice consolidating rebound this week.
Although its prudent to be cautious, there’s plenty of liquidity still around and I would not be surprised to see a melt up to shake out the shorts and get bullish sentiment way over the top. If the Fed stops hiking next week we could have that scenario.
Battapaglia went negative this year, that’s all we need to know.
On the other hand, last time that much volume appeared, in October, the market bottomed.
this was a large LEAPS options expiration with a large movement down, following a massive move (in general) from October to Jan, so couldn’t a lot of volume result from this and not just any old day’s big volume?
-][
There is NO FEAR in this market at all… How is it that everybody just brushed off the GDP numbers today?! Crazy stuff.
Plus- I think it is outrageous that everybody believes the Fed will iron out any bumps in the road with rate cuts. The market should be a little more cut-throat than that…
And here’s some news for everybody: 1) OPEC/Iran will not cut production at $70/barrel, 2) everyone will probably keep making threats to keep oil around $70/barrel and 3) the Fed won’t cut rates until there is blood on the street.