No Real Buyers And Sellers Around

You see what's happening today? Drifting lower, on no volume, with no one particularly caring? The worry is that this could like a lot like the first part of next year, when days of heavy volume (thanks to post-Madoff redemptions) are punctuated by days where little buying and selling occurs.

Technicians are tempted to dismiss days like today, where you have slow, downside moves, because the volume is practically nonexistent. There are no real buyers or sellers around.

Meantime, we are breaking the modest uptrend that began with the market bottom on November 20th. If you're looking for signs of a real bottom, don't strain yourself: it just isn't there.


1) According to TrimTabs, there has been an 11 percent decline in payroll withholding during the first 2 weeks of December, an unprecedented decline. Why is that important? Because December and January are two of the biggest months for income--it's the month many bonuses are given out, and the months we see strong seasonal hiring. It appears neither of these are materializing.

2) Market bottoms are usually associated with pickups in insider buying and buybacks, but it's not happening yet: Announced buybacks declined 90 percent this month, while insider buying declined in November to the lowest level in years.

3) While volatility as measured by the spot VIX has been declining, VIX futures for forward months remain high, indicating that traders are betting on volatility returning in the coming months.

Meantime, a common occurrence, withdrawing of guidance: Manpower withdrew guidance, citing continuing declines in global termporary-staffing demands Visteon withdrew its 2008 guidance on bigger than expected declines in global vehicle construction.

- The Dow 30 at a Glance

Questions? Comments?