Odd-Lot Short Sales on the rise

[calibertrader]

Another interesting fact:

The same people, who refused to get into the market before the 1999 - 2000 runup and then jumped in, and couldn't stop talking about how they will quit their jobs and do this for a living, are now talking about how they should liquidate their stocks, mutual funds and move the money into safer havens like they had them before. So slowly but surely, the last wave of money, that took the market up, is now starting to bail out. I've had several of these conversations lately, and couldn't help but chuckle (felt bad, cause these people never understood and never will understand the market). The smart money was selling to them at the top, and now will be buying from them at the bottom. But again, this unmeasured sentiment, is just another gauge to use to find a market bottom. Who knows how long it will take most of them to bail. And until they're done getting rid of their mutual fund holdings, they continue to keep pressure on the funds to sell stocks to raise funds for redemptions.

 

[chasinfla]

the mutual fund holdings...that's what I need to track -- % cash. Last I saw, it was at historic lows...so, if redemptions start, liquidation MUST follow.

 

[maxtrax]

Has anyone done a study of odd lots as a percentage of total volume to give a better look at what the total odd lots sales?

I wouldn't mind seeing that in relation to the movement of the market.

 

[chasinfla]

let's start with this...
<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=126250"width = 465 height = 315></img>

 

[chasinfla]

fwiw
<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=126259"width=485 height=325></img>

so far so good. as the spoo falls, john doe gets more comfortable being short.

 

[chasinfla]

Here is the chart for this week. Apparently, John Doe is covering somewhat.

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=130553"width = 450 height=315></img>

Odd lot short sales, as a percentage of total NYSE volume, declined.

The <A href="http://www.elitetrader.com/vb/attachment.php?s=&postid=130568">VIX</a> has not spiked. The <a href="http://www.elitetrader.com/vb/attachment.php?s=&postid=130568">volume</a> at this point is low relative to the July lows. That would indicate that we are just not there yet. I guess we'll see how reliable these indicators are (and whether this is the right conclusion).

 

[chasinfla]

DJIA, Volume and VIX long term.
<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=130572" width=425 height=315></img>

 

[chasinfla]

I have the monthly chart here going back pre 1987, showing the VIX spike at the time of the Crash.

 

[chasinfla]

There was a spike in Odd Lot short sales as a percentage of total NYSE volume on the very day the market bounced (9/30). It has been declining since. The 10 day moving average of the short sale volume ratio is declining, as well.
<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=134462"></img>

Note that the scale only applies to the spoo closes. The ratio at the last data point is 0.000562.

 

[MACD_addy]

Thanks for the 411 !

MACD