| Tuesday, July 30th, 2013 | | | | | |
 | | | | The Big Coil | | | - Where did all the traders go?
- Watch out for mean reversion
- Plus: Urgent--fix this e-mail problem now
|
| | | Greg Guenthner coming to you from Baltimore, MD...
 | | Greg Guenthner | Closely monitoring the market has been a real snooze lately...
"If you didn't pay attention to the stock market last week, you didn't miss much," quipped my trading buddy Jonas Elmerraji.
It's true. Summer can be a tough time to be a trader.
How tough? Back on July 15, the market hit a rather unremarkable (and completely boring) milestone.
Just two weeks ago, volume on the New York Stock Exchange fell to its lowest level of the year, according to the WSJ Market Data group. Only 2.57 billion shares exchanged hands. To give you some context, the average daily trading volume was more than 4 billion just two years ago.
Where the heck did everybody go?
Sure, it's summer. It's the season when traders typically peel their faces off the computer monitors and head for the shore. But volume has been trending lower for years now. Ever since the financial crisis, average trading volume has sunk lower and lower.
However, you shouldn't get too comfortable with this low-volume environment. The time for mean reversion is near, says S&P Capital IQ's Sam Stovall.
"I believe the watch phrase for the future of S&P 500 trading volume is: Prepare for an upturn," says Stovall via MarketWatch. "In the short term, seasonal factors are likely to increase average monthly volume in the remaining months of the year. From a longer-term perspective, I believe that current volume levels will not likely become the norm. As the global economy continues to recover and corporate earnings remain on the mend, individuals and corporations will eventually feel the need to put their money to work."
Just as the sideways price action we're seeing this month won't last, neither will the low-volume conditions that have characterized the post-financial crisis market.
Right now, the market is like a giant spring that has coiled for years under the weight of the world's worries. When the spring snaps and normal trading volume begins to rush in, dramatic rallies are possible.
Your job is to get in ahead of the rush. Use the sideways market to load up on your favorite names. Waiting will cost you dearly if traders kick the market back into gear this fall…
| | |  | | | | Rude Numbers | Targets, Predictions and Wild Guesses
| | | | $35.1 billion | is the value of the recent merger between ad-firms Publicis and Omnicom. Dubbed a merger of equals, the massive deal spawns the creation of the world's biggest ad agency. | | $2.4 billion | will be paid by Hudson Bay to acquire retailer Saks (that's $16 per share). Saks' flagship store alone sports an $805 million price tag. | | 30 years | have gone by since the labor force participation rate was as low as it is today. Despite supposed improvements in the unemployment rate, only 63.46% participated in the job market in the latest quarter. | | $1,326 | marks the spot for gold futures this morning. The yellow metal is down just $2 so far today… | | 1,687 | is where you'll find S&P futures early this morning. | | | | | | | | Rude Trends | When to Buy... When to Sell
| | | I've had some trouble with my Gmail account lately. If you use Gmail, you've probably noticed the changes, too.
The folks at Google have updated my inbox. Note to Google: It was working fine—not sure why you needed to change it...
Anyway, my inbox is now divided into three sections. A lot of my important messages (including the Rude Awakening and a few of my other must-read subscriptions) are now ending up under the "Promotions" tab by default for some reason.
If you wish to continue receiving Rude Awakening in your inbox, just select the latest edition and drag it to the "Primary" tab. When asked to do this for future messages from Rude Awakening, click yes.
Make the changes now so you won't let another issue of the Rude slip into some archived folder.
If you're still not sure how to do it, check out the image below:
That should do the trick—at least until the tech gods decide to fix what ain't broken again…
[Ed. Note: Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner]
| | | | | | | Ignore At Your Own Peril | Today's Must Read Links
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