• 1 day New Study Equates Luxury Cars With Low Self-Esteem
  • 2 days Rio Tinto To Spend $1 Billion To Reduce Its Carbon Footprint
  • 2 days The Ultra-Wealthy Lost $140 Billion In One Day
  • 3 days Three Energy Casualties In The Coronavirus Crisis
  • 4 days Markets Crumble As Coronavirus Panic Peaks
  • 4 days Cobalt May Be The Key To Clean Hydrogen Fuel
  • 6 days How Taxpayers Are Bankrolling The EV Revolution
  • 7 days The Coronavirus Is Crushing China’s Car Market
  • 8 days Fighting For Survival In The Streaming War
  • 8 days Want A Job? Forget About A Bachelor’s Degree
  • 9 days Another Major Car Maker Is Backing Hydrogen
  • 9 days Are Americans Finally Sold On Soccer?
  • 10 days Is The Tech Bubble About To Burst?
  • 10 days Coronavirus Could Cost Tourism Industry $80 Billion
  • 11 days What Web Traffic Trends Can Tell Us About The World
  • 11 days Miners Face Greater Headwinds
  • 12 days Boris Johnson Proposes Billion Dollar Bridge To Northern Ireland
  • 13 days Goldman Slashes Oil Price Forecast By $10
  • 14 days Tesla Raises $2 Billion In Share Selloff
  • 14 days What The T-Mobile Takeover Of Sprint Really Means For Markets
How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

Elliott Wave International

Elliott Wave International

Elliott Wave International

Elliott Wave International (EWI) is the world's largest market forecasting firm. EWI's 20-plus analysts provide around-the-clock forecasts of every major market in the world via…

Contact Author

  1. Home
  2. Markets
  3. Other

U.S. Stocks: Volume, Volatility -- and What Should Come Next

We should soon see more "all or nothing" days in the stock market

Bespoke Investment Group uses an interesting term to describe recent stock market action: "all or nothing." In the stock market, "all or nothing" days occur when at least 80% of the stocks in the S&P 500 index advance or decline.

It's typical to see a spike in "all or nothing" days when there's a jump in market volatility. But the recent unrest in the stock market has seen a rare phenomenon:

"The frequency of all or nothing days in the S&P 500 over the last 15 trading days is unheard of," [according to a Bespoke market researcher]. "Using our breadth data going back to 1990, we have never seen a 15-trading day period where the S&P 500 saw as many or more all or nothing days than it has in the current period."

CNBC, September 10

Specifically, there were 11 of these occurrences in the 15 trading sessions.

Also, in a one-month period, the CBOE Volatility Index jumped 120%. Yet -- the panic we saw in the market in late August proves that few traders saw it coming.

Elliott Wave International's subscribers were prepared better than most. On August 19, EWI's Elliott Wave Theorist called for a "pandemonium" in stocks, and a few weeks before, EWI's July Elliott Wave Financial Forecast offered this chart and commentary:

CBOE Volatility Index

This chart ... shows the open interest in puts relative to calls on the VIX, which indicates the ratio of investors' open option contracts betting on a VIX move. On June 19, the ratio dropped to 0.248, its second lowest level since February 16, 2007 (0.165)....

When the stock market's decline kicks into high gear, volatility will spike to record levels as will the p/c ratio. The era of low volatility will be replaced by head-spinning stock market moves that will shake global stock markets to their foundation.

You remember what soon followed: Stocks fell hard, and on August 24, the S&P cash index saw a selloff low of 1867.01.

Since then, as our September 11 Short Term Update chart below shows [wave labels available to subscribers], trading volume has steadily contracted.

SPX Daily Chart

Some stock market bulls are bolstered by the lull in trading volume. But know this: Our indicators strongly suggest that now is not the time for such confidence in a continued uptrend. We expect the number of "all or nothing" days, to use Bespoke's term, to increase dramatically when volatility returns.

These are just a few examples of the insights that EWI brings their subscribers every month. See below how you can read the complete August Theorist -- FREE.

 


Get the full story in Prechter's Theorist -- FREE

If you invest in U.S. stocks, please stop what you're doing, sit down and pick up Robert Prechter's Aug. 19 investment forecast. Prechter published one of the most widely read investment letters of the 1980s, and he remains one of the most widely known market technicians in the world. On Aug. 19, before the latest spike in volatility, he warned of "pandemonium in the stock market" and a "stunning decline in US stock prices." Now you can read his complete, subscriber-level report that predicted what you see today.

Download Prechter's 10-Page Report Now - It's FREE >>

This article was syndicated by Elliott Wave International and was originally published under the headline U.S. Stocks: Volume, Volatility -- and What Should Come Next. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

 

Back to homepage

Leave a comment

Leave a comment