Investors continue to throw up their hands in frustration with the market.
According to a CNBC poll, 86% of the population thinks the market is stacked against them, and they blame regulators and high-frequency traders for letting the market get to a state where they’re not working.
Meanwhile, Themis Trading, which has been a big critic of High-Frequency Trading points out how narrow the market action has become by looking at what stocks provided the bulk of the action.
Able Noser has a report out that details how just 112 stocks are responsible for 50% of the trading volume. Actually, just the top 20 stocks are responsible for 26% of the trading volume! That’s all you need to know. Bots are playing with their bull bias, and therefore so should you.
More amazingly, 9 of the top 20 names by volume are ETF’s! So basically, eleven stocks kind-of matter. The rest are just correlation, low-volume stat-arb stories. This is what our market has become.
This is obviously a huge theme right now, with all kinds of ramifications from lack of volume, to the end of mutual funds, and the beating being taken by market-neutral arb strategies. Basically, if you want to play, you’re stuck with a narrow set of names like Google, Apple, and the SPY ETF.
For more, see Raymond James’ Jeff Saut from yesterday and see our Vincent Fernando who argued recently that this trend will soon end and that stock picking will return.