Thursday, September 06, 2007

Baffled about the market, join the club

It appears that everyone is waiting for something, some news, some insight, to tell them what to do in this U.S. equity market. Trading volumes are low. The summer vacation season is done, there has been more than enough news in recent months, and yet trading is far below normal. Even the market pros seem to be sitting on their hands and wondering what to do.

Today at 2pm major liquid stocks like GE, MSFT, JPM, PFE, AIG, MO, etc. are on course to have trading volume at about half of their three month average. Stocks with significant market news around them like AAPL, COST, and LVLT will have volume just modestly above their average. Real estate stocks are down for the most part, except for favorite JOE, and all have low volumes as well. Small caps are just hardly trading. PESI has an average volume of 123,000 shares and at this point has trades of 3000. PATK has average volume of 9000 and has no trades.

Is this bullish or bearish. Is there no interest in buying, or no interest in selling. Take your pick. My bet is that buying is underway, big buying orders, that are being handled carefully so as to keep the prices low for as long as possible. Accumulating positions at the right price requires finesse for the big players. They need to be invested in stocks, and this is an opportunity. That of course does not insulate them from any more bad market news, if it comes, and at some point the opportunity to accumulate at an even lower price becomes painful.

2 Comments:

Anonymous kf said...

Reference your last sentence, as in JOE.

3:07 PM  
Anonymous Anonymous said...

Low volume is unequivocably bearish. Isn't that just common sense.

3:18 PM  

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