"Quiet Time" on Wall Street
Quiet time has enveloped Wall Street. These two weeks before Labor Day are usually pretty quiet. But maybe this time the market is trying to say something rather than just snoozing.
Volume is low, but it's been low for months. In fact, volume has declined since 2008, so really it's been years. Has the individual investor given up on the market? Have the "algos" (computer programs that trade the market for institutions) scared the retail investor away? Is that why volume is so weak?
The recent debacle with Knight Trading was only the latest scare. Knight's stock collapsed when it's trading software went haywire and the company lost hundreds of million in a few seconds. It was saved from bankruptcy or liquidation by a few investors who swept in and bought up their beaten-down stock. Has the Knight drama reinforced the dangers of trading in today's markets against the algorithmically-driven software programs that trade millions of shares in milliseconds?
Have the losses that investors suffered over the last decade finally convinced many of them to run from stocks? First it was the long three years of losses in 2000-2001-2002. Year after year, in the face of their brokers and advisers telling them to "stay the course," people watched their stock investment dwindle. Piece by piece the savings of a lifetime began to crumble.
And if you stayed the course, along comes 2007-2008. In a flash - mostly September-October 2008 through March 2009, you could have lost 50% of your stocks' value. This time it didn't take three years. It took a few short months.
Is all this wearing people out?
Add to this the losses so many have suffered with their homes. Imagine having a significant percentage of your retirement account in stocks and losing significant amounts of money twice (2000-2002, 2008), then seeing the value of your home - touted for decades as "your greatest investment" lose 30%+ of its value? This happened to a lot of people and it must have been pretty traumatic.
In any case, with volume trending down for years, and now wallowing in the pits as it always does these last two weeks of August, there's simply not much going on.
But you have to wonder whether this time, the market isn't saying something. Maybe this latest round of "nothing happening" is saying that nothing will be happening. They say the stock market looks forward. If that's true, then maybe the market is telling us not to expect too much of any real significance in the coming months.
Yes, I know that there's talk of Israel attacking Iran, Syria disintegrating and dragging the Middle East into a bigger conflict. I know the Russians sent ships into the Mediterranean. And, of course, the U.S. government has its hands in just about everything.
But in spite of it all, maybe not much is going to happen in the fall after all - besides, of course, the election.
So maybe the best thing is for us all to just get some rest and relaxation, right?
Volume is low, but it's been low for months. In fact, volume has declined since 2008, so really it's been years. Has the individual investor given up on the market? Have the "algos" (computer programs that trade the market for institutions) scared the retail investor away? Is that why volume is so weak?
The recent debacle with Knight Trading was only the latest scare. Knight's stock collapsed when it's trading software went haywire and the company lost hundreds of million in a few seconds. It was saved from bankruptcy or liquidation by a few investors who swept in and bought up their beaten-down stock. Has the Knight drama reinforced the dangers of trading in today's markets against the algorithmically-driven software programs that trade millions of shares in milliseconds?
Have the losses that investors suffered over the last decade finally convinced many of them to run from stocks? First it was the long three years of losses in 2000-2001-2002. Year after year, in the face of their brokers and advisers telling them to "stay the course," people watched their stock investment dwindle. Piece by piece the savings of a lifetime began to crumble.
And if you stayed the course, along comes 2007-2008. In a flash - mostly September-October 2008 through March 2009, you could have lost 50% of your stocks' value. This time it didn't take three years. It took a few short months.
Is all this wearing people out?
Add to this the losses so many have suffered with their homes. Imagine having a significant percentage of your retirement account in stocks and losing significant amounts of money twice (2000-2002, 2008), then seeing the value of your home - touted for decades as "your greatest investment" lose 30%+ of its value? This happened to a lot of people and it must have been pretty traumatic.
In any case, with volume trending down for years, and now wallowing in the pits as it always does these last two weeks of August, there's simply not much going on.
But you have to wonder whether this time, the market isn't saying something. Maybe this latest round of "nothing happening" is saying that nothing will be happening. They say the stock market looks forward. If that's true, then maybe the market is telling us not to expect too much of any real significance in the coming months.
Yes, I know that there's talk of Israel attacking Iran, Syria disintegrating and dragging the Middle East into a bigger conflict. I know the Russians sent ships into the Mediterranean. And, of course, the U.S. government has its hands in just about everything.
But in spite of it all, maybe not much is going to happen in the fall after all - besides, of course, the election.
So maybe the best thing is for us all to just get some rest and relaxation, right?
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