Sliding Into the Fall

Stocks traded at new volume lows for the year for the fifth straight session on Wednesday. Volume has diminished every day leading up to the Labor Day holiday weekend.

It would be wise to assume that this kind of low-volume trading will continue through the end of the week unless there is some kind of surprise world-shaking event, and even that seems to be out of the equation.

Dow 11,502.51 +89.64; NASDAQ 2,382.46 +20.49; S&P 500 1,281.66 +10.15; NYSE Composite 8,349.84 +86.12

Making any kind of serious changes in trading positions at this juncture is also not a good idea. The markets are still slogging through some serious problems and the bottoms reached in July have yet to be retested. There's bound to be at least one more serious downdraft before the market and the overall economy can begin moving forward. Of course, since stocks are a kind of discounting mechanism, they are likely to move well before the rest of the economy, but we don't seem to be there yet.

On the day, advancing issues outperformed losers, 4250-1724. New lows remained in the lead over new highs, 148-60. The relationship of new lows to new highs has become a permanent feature of this market condition. There are just more bad companies than good ones, though surely, some are already below fair value. That's a story for another day, however. Investors are simply content shedding losers and not in a very sprightly, speculative mood.

To almost nobody's surprise, oil gained slightly, up $1.88, to $118.15, in advance of the American holiday. It's somewhat of a bad joke, how the oil companies manage to get the price of fuel up just when everybody is about to use more of it. That feature of the rigged commodity speaks volumes about the stranglehold the five major oil companies have on the world's economies.

Gold was up $5.90, closing at $834.00, but silver fell 11 cents, to $13.57. This little run-up in commodities is probably going to end badly as the downward trendline has yet to be broken, and like stocks, look to be heading down even further.

What is of interest as we drift into fall, is how markets will respond to the change of season and whether volume will improve after the holiday. There are some who believe this lower volume phenomenon is going to hang around a while longer, possibly until the November elections, being that political change may have more to do with the markets than anyone dares believe.

NYSE Volume 820,385,000
NASDAQ Volume 1,570,050,000