S&P Futures; Lowest Volume of the Year.

2015-May 22

‘Sell in May and Walk Away’ ending up as one of the best months of the year, but where have all the traders gone? This piece of my online chat with the PitBull says it all:

11:10:59 PITBULL: mkt many times rallies into a holiday weekend and then experiences a trend change in the next week and

11:24:20 PITBULL: rally every day into London close and last but not least;

Yesterday, Vikram pointed out to me that the long-term charts in the S&P are making a rising and falling pattern that has continued for months into a narrowing wedge. He went on to say that we seem to be in another wave of the same upward wedge pattern and the record highs of this week fall just below where the top of the current wave should be, around 2150-60.

So, the holiday tendency, and the long-term chart patterns are lining up. Add to that the thin volume. Downtown Chicago this Friday is a little less crowded with office-goers and has more tourists. People are getting a head start on the three-day holiday weekend and that includes traders, especially those traders who are happy to take profits at all-time highs.

The thin volume makes a late Friday RIP possible with a thin-to-win run up. PitBull summed it up when we discussed the low 769,000 contract volume of the day, which included electronic overnight trading:

04:02:49 PITBULL: GOD HELP US TOMORROW 769K

Plain and simple, the ES is still trying to go up, and “clearly” the historically low volume and the 3 day weekend is only adding to it. But I have news for you traders the low volume we are seeing now is only going to go lower as the summer kicks into gear. The VIX dropped down to 12.11 (-5.98%) only adding to the sluggish, low volume grind.

In Asia 6 out of 11 markets closed lower, and in Europe 7 out of 12 markets quoted are trading higher this morning. Today economic calendar includes Consumer Price Index and Federal Reserve Chair Janet Yellen speech on the economic outlook in Providence, Rhode Island.

Our View: Well I took my own advice and got run over. That happens now and then, and when it does I have to go back to the basics. I do not risk thousands of dollars but after being up, down and back up on the month the bad trading cost me over 50% of what I was up. In a thin volume day it’s safest to keep your own trading light, since even in a slow grind you can get some unpredictable moves. You don’t want to get caught on the wrong side. That said, we’ll be watching for a Friday Rip to the upside, which may come early as traders try to close their books early. Sell the early rallies, buy weakness, but have an exit target both for stop-loss and profit. You don’t want to be last one left on the dance floor.

• In Asia 6 of 11 markets closed lower : Shanghai Comp. +2.83 %, Hang Seng +1.70%, Nikkei +0.30%

• In Europe 7 out of 12 markets are trading higher : DAX -0.37%, FTSE +0.57%, MICEX +0.22% , GD.AT -0.26% at 7:00 CT

• Fair Value: S&P -2.78 (2130.82), Nasdaq -1.32 (2130.82), DOW -24.89 (18285.74 )

• Economic calendar: Consumer Price Index and Janet Yellen speaks.
  .

• E-mini S&P 5002117.25-4.50 - -0.21%

• Crude56.50+2.39 - +4.42%

• Shanghai Composite

• Hang Seng27424.19-30.12 - -0.11%

• Nikkei 22520563.15+11.69 - +0.06%

• DAX11561.34-116.23 - -1.00%

• FTSE 1007051.27+10.35 - +0.15%

• Euro1.0967

050515BCA-Blink-1