The big question is not whether last week’s rally will continue or not.
The big question is whether volume will come back on Wall Street this week.
It’s been super-light all summer, and there was some hope that it would come back last week. But it didn’t, and Friday was actually the second-lightest all year.
The excuse was that Rosh Hashanah kept investors away.
OK, but if volume doesn’t come back this week, then what will be the excuse.
Note on the chart below, the volume peaked on the day of the Flash Crash in may, and then just faded all year.
Of course, if it doesn’t come back, then whether the market rallies or not, profits at the major trading houses will continue to get whacked.