Trader Note

Markets operate in intelligent manners when the Fed is NOT in them.

2017-08-09 Doldrums

S&P Volatility, Crypto and Trader Holidays

Yesterday's price swing was a needed relief from dull markets. It is unlikely that prices will have sufficient motivation to break out of recent trading ranges in the near term. So look to revert price moves in the short term. The doldrums are not over, yet.





The S&P last week hit a record for the consecutive trading day closes below 0.3% price moves. This is the first time that has happened. The true shock for me is that it did so across a Non-Farm Payrolls release. These are the most voluminous trading releases of the colander month, second only in market moving to FOMC changes to QE policy.

So, where is all the volume?

In Crypto Markets.

Right now, most of the senior traders that want a holiday or short afternoons are off work. They have left their junior traders in charge of the desk. As they sit there bored, they are on their phones watching crypto trade. Over the last week, Bitcoin Cash (BCC or BCH) vs Bitcoin Extended ( BTC or XBT) has moved 20% high to low spread. So any junior trader that has crypto has been putting in scalp orders on their phones while the S&P does nothing.

If you know anyone working in a major trading office, have them look around at the under 30 traders to see what percentage are on their phones, just staring at price moves. These young guys are all computer savy and more likely to be watching crypto move that a baseball game.

That is where all of the volume has gone.

If you think Crypto is a fad, then you are trading the wrong side of this market.

If you bored at your archaic market (as I am), be warned that volumes will pick up soon because the big volume traders will soon return from their summers.



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