Slump in trading volume threatens Wall Street

[austinp]

Quote from bh_prop:

ES has become rather pathetic hasn't it

it ain't what it used to be, but when VIX rises back above 20 and stays above, she'll return to normal behaviors.

a lot of supposed traders out there will claim they are killing it inside 8-pt daily chop ranges, but you'll never see them post proof of such results. meanwhile, reality is that sideways chop markets require more time & patience for less net results than volatile markets do

that fact is unquestionable

 

[StarDust9182]

As Bob said, HFT has had an effect and he and I spelled it out a few years ago in ET. But other things are in play as well. I also agree with the cycle comment. It will return one day, assuming their is a wall street or something similar.

Wall street has always fleeced the middle class. They are disappearing and have less money: less lambs equals less wool. The smells from the collusion, corruption, and fraud being shown by some Wall street "traders" is coming home to roost. Most retail now think it is a fool's game and don't want to lose their money. Corporations are buying their own stock and pumping up the market with the help of the FED, but very few are fooled by that ploy.

Inequalities of information flow and inequities in legal charges and insider trading etc. are getting harder to foist on smarter traders who learn faster what to do and what not to do. They don't want to lose to feed the big fish anymore.

My analogy from the past is like strip mining the sea. Each fish needs a promise of potentially making some money or thinking they have some advantage. If you kill all the minnows, then the fingerlings begin to die, and then the bigger fish, and then etc. That is the phase we are in I suspect. Finally when there are no more fish, then the regulators and the industry will suddenly say - hey we need to do something. Then of course it is too late.

There is a simple demographics aspect as well I suspect. Old can no longer afford to fund the big guys. Youth have no money.

It used to be a few big traders and millions of fingerlings. Now is it a few fingerlings and mostly big traders. So volume drops if they don't invest in growth anymore but try to game the other big traders out of a few pennies. One happens to one, happens to us all.

I would love to see, the percentage of people actually holding stocks for a month or more compared to 40 years ago, when people believed in government, the middle class dream (Carlin says you have to be asleep to believe it), and the future. Something changed in 1980 or earlier.

 

[Bob111]

and as i said before-IB's Peterffly see it's coming before everybody else and wisely sold half of his business to the public.

 

[austinp]

Quote from StarDust9182:

There is a simple demographics aspect as well I suspect. Old can no longer afford to fund the big guys. Youth have no money.

It used to be a few big traders and millions of fingerlings. Now is it a few fingerlings and mostly big traders. So volume drops if they don't invest in growth anymore but try to game the other big traders out of a few pennies. One happens to one, happens to us all.

that is 100% the case. Many retail traders were forced out due to lowered volatility, tougher conditions and less opportunity to profit. Lots of those guys still hang around and follow the (in)action or even paper trade, hoping for better conditions ahead. But the discretionary funds used for trading are dried up & gone for most newbies.

The current short-term trading world consists of somewhat experienced traders, and big money. When volatility and ranges were insane, it was easy to make money. Now you have to be on top of your game in every aspect or you have no chance. I'd expect that to only increase if not continue, no matter what.

It is entirely possible that the markets will dry up and implode to some degree at some point in the future. If governments keep intervening with the free market system in its perfect form, they will surely nail the coffin shut. Eventually, markets will flush themselves out if given free reign to do so.

 

[zdreg]

maybe markets dries up as the country swings to the left and regulations i.e. dodd-frank curb risk taking.

 

[drownpruf]

Quote from zdreg:

maybe markets dries up as the country swings to the left and regulations i.e. dodd-frank curb risk taking.

Well it's been proven again and again that GS is the only firm on the sell-side that can trade. So I have no problem with the Volcker Rule. Maybe give GS an exemption.

 

[zdreg]

Quote from drownpruf:

Well it's been proven again and again that GS is the only firm on the sell-side that can trade. So I have no problem with the Volcker Rule. Maybe give GS an exemption.

are you the poster boy for crony capitalism?

 

[TskTsk]

Volume tends to be inverse with general volatility and with up-markets. High volume is in no way indicative of a healthy market. Especially not when the volume is from using conservative savers funds to make proprietary bets, pitching structured products, exploiting information inequity, shifting risk under the carpet and pumping credit into markets. Neoclassical theory says each transaction in the mkt creates wealth. I say bullcrap, WS has never been about wealth creation. They have always been about exploiting inefficient markets, or enabling inefficient markets through regulatory capture, collusion, intransparency, asymetric information, and God knows what else. Volume is meaningless when 90% of it is just wealth redistribution.

 

[athlonmank8]

Quote from actionzip54:

I've been saying this for years....


THEY NEED TO BAND PORN!!! It's the only way to increase volume. No one cares when they can sip beers and watch bewbs!

LOL

 

[darwin666]

As Bob said, HFT has had an effect and he and I spelled it out a few years ago in ET. But other things are in play as well. I also agree with the cycle comment. It will return one day, assuming their is a wall street or something similar.

Wall street has always fleeced the middle class. They are disappearing and have less money: less lambs equals less wool. The smells from the collusion, corruption, and fraud being shown by some Wall street "traders" is coming home to roost. Most retail now think it is a fool's game and don't want to lose their money. Corporations are buying their own stock and pumping up the market with the help of the FED, but very few are fooled by that ploy.

Inequalities of information flow and inequities in legal charges and insider trading etc. are getting harder to foist on smarter traders who learn faster what to do and what not to do. They don't want to lose to feed the big fish anymore.

My analogy from the past is like strip mining the sea. Each fish needs a promise of potentially making some money or thinking they have some advantage. If you kill all the minnows, then the fingerlings begin to die, and then the bigger fish, and then etc. That is the phase we are in I suspect. Finally when there are no more fish, then the regulators and the industry will suddenly say - hey we need to do something. Then of course it is too late.

There is a simple demographics aspect as well I suspect. Old can no longer afford to fund the big guys. Youth have no money.

It used to be a few big traders and millions of fingerlings. Now is it a few fingerlings and mostly big traders. So volume drops if they don't invest in growth anymore but try to game the other big traders out of a few pennies. One happens to one, happens to us all.

I would love to see, the percentage of people actually holding stocks for a month or more compared to 40 years ago, when people believed in government, the middle class dream (Carlin says you have to be asleep to believe it), and the future. Something changed in 1980 or earlier.

CARLIN. was hilarous. the poor class exist. just to scare the shit out of the middle class
http://www.youtube.com/watch?v=XdH38k0iUgI

on another note, have you seen the increase in seminars for stock trading, forex trading. free seminars. freebies.. in fancy hotels. with snacks included.. yup. the sucker pool is drying up, they need new recruits.. its getting pathetic.. there is a sayinhg 99.9% of all retail traders loose.. so what happens if this pool drys up??