TVO Market Barometer 10/18/17: For SPY to move ya it’s gotta be action packed

On Wednesday the Dow 23k rocketship gapped up into the stratosphere with not a pullback in sight. Meanwhile, swing trading folks back here on earth are saying they need something with more action. Well, Ryan Detrick of LPL Financial (who I had the pleasure of getting to know at Stocktoberfest in NYC earlier this year) says, “Only twice in history has the S&P 500 traded in a daily range of less than 0.3% for 4 consecutive days. Both happened over the past month.”

It’s safe to say there just isn’t a lot of action to be found right now, and this steady quiet rise is something that happens pretty much once in a blue moon (so using this month to measure the success of your gains is kin to that of betting on the lunar cycle). If you look at our trading history, you’ll see that our success comes from much wider swings (closer to 3% rather than 0.3%), so needless to say we’ve been on the sidelines for a while.

There has been, however, quite a bit of action in the volume department. Both TVO and IO have been continuing to fall rapidly, so while prices are shooting higher, we’re seeing what could very well the tip of the iceberg. Also, Wednesday’s overall volume rose while bears and bulls were virtually in a stalemate (HG was COOL) which means another day of churning (just like last Wednesday) to take notice of.

Anyone who’s been hankering for action knows very well (at least if they’ve been trading longer than a month) that change can come pretty fast in the market. So sit tight and pay attention, to volume that is, because if you blink you just might miss it. -MD

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