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There's a lot of talk in the Lounge right now, about how activity has fallen off of a cliff. Just two months ago, the average daily volume was about 1.3k comments. Now, we're averaging below 500. Why? The market's crappy.
And what we're observing also lines right up with the amount of volume being traded right now (the red/green plot at the bottom of the chart, is volume). I don't know about you, but I like to use SPY to get a pulse on the overall market sentiment. All in all, the indices track each other well enough for it to not really even matter which poison you pick. So, what's happening here?
It's generally understood that the harder and faster a stock pumps, the less likely it will be that it actually holds the gains that it achieved. Or rather, the more likely it will be, that it comes crashing right back down again. Here in the penny stock world, we're all subject-matter experts on this by now - but it also applies to the entire stock market. It's just a fact of life.
The old-school traders will remember the pre-Jerome Powell days (norms), where it was common knowledge that investors could expect an average of about 7% annually on their investments. Maybe a little more, maybe a little less. Once Powell took over the Fed and fired up the printers like never before, it wasn't unusual to see that in a single week.
Even the most recent run-up, by "Powell standards", was rather conservative. Yet, by traditional pre-Powell standards, it still encompasses 3x a year's worth, within 44 days. And this has been "normal" since 2018. To really put the issue into focus, from January 2018 to January 2026, an investor would expect to see a roughly 56% return during that time. However, what actually happened was 143% - nearly three times that amount.
Since 2018, the market has been growing at 3x the normal pace. And as we know, hard and fast is less likely to hold.
The all-time high was set back on 02 June, and for the last 6 weeks, the market has been trading under that level, with dying volume. The vicious attack on oil and gold has not done much to push it higher. It's important to point out that it was under this backdrop of dying volume, that the PDT rule was done away with. And now the results are in: it didn't help.
My theory is this: retail has been officially swindled out of the market. There's nobody left for institutions to offload their shares onto, in any meaningful numbers. The uncontrolled, rampant and relentless manipulation in the markets in the effort to push the market higher at 3x the normal pace for 8 solid years, has fundamentally broken the market. The PDT rule going away, won't get retailers their money back.
When's the "big one"? Well, nobody knows. I can definitively say that any day now, we're going to see the market take another massive dive, though. I could be wrong, of course, but with how it looks right now, I'm pretty damn sure of it.
How you want to handle that, is on you. Just remember, ETFs can be pulled without warning. Ask the XIV folks what that's like, if you can find any.