Why are the Markets So Eerily Quiet?

I'm sure if you've been on the floor or checking on your portfolio today you’re wondering too, “Why are the markets so eerily quiet right now?”

 

But do you know just how quiet it has been? Well, according to an article posted today by Luke Kawa and Julie Verhage, the 20-day moving average of volume across all of U.S. stock exchanges is at its LOWEST level in over a year. Now that's quiet the muffled market.

 

Some Speculation on Why the Stock Market is Holding its Tongue

 

  1. It’s Summer! Yes, this is of course a factor as the Northern Hemisphere celebrates family and relaxation during this 2 ½ month vacation from school, and the weather screams FUN! in the sun.

  2. As David Scutt, writer for Business Insider, put it, “a vast majority of investors are of the opinion that central bank policy will remain ultra loose for the foreseeable future.”

 

Want to see just how slow these bad boys have been crawling: check out this graph from Bloomberg and see more in Kawa and Verhage's article, "The Nine Charts Show Just How Quiet the Market is Right Now."

What this Means for You

 

As an investor, this could mean a few different things:

  1. Are you going to sit and enjoy the lazy river ride, cut your days short and consider it a job well done? Are you going to let out the sails and enjoy the luff as you soak in the sun?

  2. Or are you going to take this stretch of calm water and dead air lull as an opportunity to test the waters elsewhere? Track the stocks, read up on the major companies’ new business projections, make some new observations? Because we know that whenever the air is clear you can see so much farther along the horizon, allowing time to buy, sell, or short with mindfulness, in preparation for whatever comes next.

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