Bears fattening up on ripened summer fruits?
The bears are on the prowl during this mid-vacation-season.
While the second team is in charge, trading volume of all stocks typically declines a bit. Yesterday it ran about 4.4 billion shares on the NYSE, AMEX, NASDAQ, and regional exchanges. ETF volume, on some days over 50% of the total, was down to 30%, at 1.3 billion shares.
The lower volume encourages some players to stick around during a time when their activity can have a more pronounced market effect. Trading of leveraged and short ETFs gives us a look at what they may be up to.
At yesterday’s prices, all ETFs traded over $58 billion, down from a prior 3-month daily average of $68 billion, a decline of -15%. Over 9/10ths of the usual $68 billion is in 76 ETFs that normally trade over $100 million a day. Over 3/4ths of the action is in two dozen ETFs that each trade over $ ½ billion daily.
Over $9 billion of trades were in inverse, or short-positioned ETFs, with less than $6 billion in leveraged long ETFs.
High rollers like the 3x action of the FAS (leveraged long) and the FAZ (levered short).
While trading in the FAS edged off less than ¼ of 1%, volume in the FAZ doubled.
FAS is trading near the middle of its past 52-week range, while FAZ is near its low.
A quick check of all the inverse, or short-position ETFs among the most actives shows that they too are trading near or at their lows.
They may not stay there when the first team returns.