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On a simple examination if you look at volume (applying a 5 period expMA)
on NYSE then this is divergent to the price rise we saw in the Dow from
Oct8 to today just as it was in the rally from sep1 to sep24. Volume was
convergent with the moves down over the last 8/10 weeks or so.
regards
Philip
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> From: Tom Stein <comfut@xxxxxxxxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Subject: Re: MKT Rally on light volume
> Date: 23 October 1998 14:30
>
> Earl wrote "One of the more puzzling aspects of the rally from the Oct
low
> has been the relatively light volume on the futures whether one measures
by
> contract volume or net tick volume (net intraday up/dn ticks)"
>
> I would have expected the volume in the futures markets to be greatly
> reduced. We just had the largest point move in the shortest period of
time
> during pit-session trading that I have witnessed in 16 years of trading,
> INCLUDING the 1987 crash. Remember, this type of move does not happen on
> the downside due to 25 point limits. Consider:
>
> 1)Last Thurs. 50.00 move in 5 minutes increased the risk of S&P futures
> trading dramatically.
>
> 2)Floor traders are reducing their own scalping lots
>
> 3)Off-floor day-traders are reducing their size as well
>
> 4)Many firms are requiring higher than 50% margin for day-trading the
> S&P...some have gone to full margin.
>
> 5)The battlefield is littered with bodies after the Fed came in with a
> cannon that blew up
> many of the troops. Many were injured badly. The healing process will
take
> time.
>
> The Fed reserve in it's own peculiar way has increased the risk in
> derivatives rather than decreased the risk. Without liquidity, these
> markets will die a slow death. Good or bad????
>
>
> Tom Stein
> comfut@xxxxxxx
>
>
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