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Low Volume: Should You Strike While Others Sleep?

Tuesday, 16 Mar 2010 | 5:34 PM ET

With volume unusually low for this time of year, should you strike while other investors sleep?

If you follow the market at all, you likely know that the S&P has broken above 1150, an important technical level; that’s typically a bullish sign.

But there’s one caveat – the gains happened during a period of low volume.

On Monday of this week 7.29 bln shares were traded across all U.S. exchanges, the third lightest day this year, writes the website Briefing.com.

And last week the NYSE experienced its 8th lightest weekly volume in the past 6 years, according to Todd Gordon of Forex.com.

Clearly the bulls are pushing higher while the bears sleep. Should you strike now, despite the lack of conviction -- or are the bears about to let loose their fury?

Where Have the Investors Gone?
A look at where big money is, with Steve Grasso, Stuart Frankel.

According to Steve Grasso, there’s no time like the present.

He thinks the market climbs to 1185. "I'm not skeptical of this rally," Grasso says.

Grasso believes that the low volume isn’t anything to worry about – it’s not a sign of caution – so much as it is big money waiting for the rhetoric to die down in Washington concerning bank reform and health care reform.

And while they wait – he’s sees a tradable trend. According to Grasso market pros are rotating money – selling their big winners such as Macy's which is up 25% in 3 months and buying laggards.

Check out the following:

Traders Selling Leaders, Buying Laggards
Buying Selling

Burger King McDonald’s

NCR IBM

Walmart Costco

As a result he suggests taking long positions in select names that have underperformed relative to their peers.


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Trader disclosure: On March 16, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Grasso Owns (TSO), (AAPL), (ABK), (ASTM), (BA), (BAC), (BGP), (C), (COST), (CSCO), (PFE), (PRST), (WMT), (FAZ); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Najarian Owns (BAC) Call Spread; Najarian Owns (C) Calls; Najarian Owns (F) Calls; Najarian Owns (GE) Calls; Najarian Owns (HOG) Call Spread; Najarian Owns (INTC) Calls; Najarian Owns (MCD) Call Spread; Najarian Owns (NSC); Najarian Owns (PCX); Najarian Owns (BP); Seymour Owns (AAPL), (BAC), (F), (GE), (TSO),(XOM); Terranova Is Short (AMR); Terranova Is Short (CAL); Terranova Is Short (GOOG); Terranova Owns (POT); Terranova Owns (TER); Terranova Is Long. Dec. 2010 Crude Oil Futures; Edwards Owns (CBI) For Clients; Edwards Owns (GLD) For Clients; Edwards Owns (GE) For Clients; Edwards Owns (CVX) For Clients; Edwards Owns (QQQQ) For Clients; Edwards Owns (SPY) For Clients; Edwards Owns (XOM) For Clients; Stutland's Firm Is A Market Maker In VIX, Is Short Volatility; Stutland's Firm Is A Market Maker In SPX, Is Short Volatility; Stutland Is Short (GLD); Stutland Owns (CVX), Is Short Options; Stutland Owns (GE) And Is Short (GE) Calls And (GE) Puts

GE Is The Parent Company Of CNBC

For Tim Seymour
Seygem Asset Management Owns (MTL)
Seymour Owns (AA)

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (GOK)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLI)

For Steve Grasso
Stuart Frankel & Co. Inc. And Its Partners Are Short (AAPL)
Stuart Frankel & Co. Inc. And Its Partners Own (ABK)
Stuart Frankel & Co. Inc. And Its Partners Own (CUBA)
Stuart Frankel & Co. Inc. And Its Partners Own (GERN)
Stuart Frankel & Co. Inc. And Its Partners Own (GLG)
Stuart Frankel & Co. Inc. And Its Partners Own (HSPO)
Stuart Frankel & Co. Inc. And Its Partners Own (NWS.A)
Stuart Frankel & Co. Inc. And Its Partners Own (NXST)
Stuart Frankel & Co. Inc. And Its Partners Own (NYX)
Stuart Frankel & Co. Inc. And Its Partners Own (PDE)
Stuart Frankel & Co. Inc. And Its Partners Own (PRST)
Stuart Frankel & Co. Inc. And Its Partners Own (RDC)
Stuart Frankel & Co. Inc. And Its Partners Own (TLM)
Stuart Frankel & Co. Inc. And Its Partners Own (TOL)
Stuart Frankel & Co. Inc. And Its Partners Own (XRX)
Stuart Frankel & Co. Inc. And Its Partners Own (SDS)
Stuart Frankel & Co. Inc. And Its Partners Are Short (QQQQ)
Stuart Frankel & Co. Inc. And Its Partners Are Short (CL)

For Brian Kelly
Kanundrum Capital Owns (GE)
Kanundrum Capital Owns (JPM)
Kanundrum Capital Owns (PAG)
Kanundrum Capital Owns (SCHW)
Kanundrum Capital Owns (CVX)
Kanundrum Capital Owns (DE)
Kanundrum Capital Owns (ELX)
Kanundrum Capital Owns (BRCM)
Kanundrum Capital Owns (TXN)
Kanundrum Capital Owns (QCOM)
Kanundrum Capital Owns (POT)
Kanundrum Capital Owns (IPI)
Kanundrum Capital Owns (MOS)
Kanundrum Capital Owns (GLD)
Kanundrum Capital Owns (GDXJ)
Kanundrum Capital Is Short (FCX)
Kanundrum Capital Is Short (FXI)
Kanundrum Capital Is Short (EWH)
Kanundrum Capital Is Short (EWY)
Kanundrum Capital Is Short (SDS)
Kanundrum Capital Is Long U.S. Dollar
Kanundrum Capital Is Short Copper
Kanundrum Capital Is Short Treasuries



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