Remember that "big money" volume we were waiting to see enter the market? Well, it finally showed up. But it showed up with a fistful of sell orders.
The stock market needs the "fuel" of buying from large mutual funds, hedge funds, and pension funds to stay healthy. For the past few months, we noted the lack of participation from these buyers.
At the bottom of our chart of the benchmark S&P 500 fund (SPY), you'll notice a series of black and red bars. Black bars represent trading volume on days the market advanced. Red bars represent days the market declined. The taller the bar, the greater the volume.
As you can see, volume gradually dried up during the summer rally. But in the past week's selloff, volume has boomed. The big money has returned... and it's selling right now.
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