TVO Market Barometer 12/1/16

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When it comes to stock market sectors, folks are saying nothing much matters more than rotation, rotation, rotation. But instead of trying to make sense out of the rise and fall of all the different sectors, you only really need to look at volume to get a clear picture of how things get shifted around. Over the past week, the Nasdaq has been led by a volume-heavy institutional sell-off. On the big board, however, it’s been a bit of a mixed bag with a/d volume showing almost the opposite case over the past 2 sessions (Wed nearly logged an accumulation day). Volume on the big board rose almost 50% on the day of the Opec meeting, but fell more than -5% on Thursday.

So the sudden flow of money from tech into energy (which many said should have catapulted the market even further, but instead resulted in a “blow off top”) is the long-awaited ominous sign that the whole thing is gonna blow soon, right? Well, before all the anxious bears out there feel the urge to start posting monumental “bear market has begun” tweets, the big institutions have not yet signed off on that prospect (still only one day of distribution on SPY in the last month), and any selloff here would be considered healthy and likely to be bought. They’re probably thinking if the jobs report doesn’t shake out the nervous Nellies, the Italian referendum might just do the trick. -MD

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