The big story of last week wasn’t a story at all. It was the lack thereof – the eerie quiet in the market.
We saw the S&P 500 drop to its lowest weekly volume figures since October. But back then, we had a reason: everybody was waiting for the presidential results before investing in stocks again.
This time around, the low buying isn’t as easily to nail down. We were charting into new all-time highs, but volume was abysmally low.
In fact, last Friday’s volume was the lowest since Christmas Eve 2020.
This is a big, flashing sign that buyers are pumping the brakes ahead of earnings season, which starts this week with companies like JP Morgan (JPM), Fastenal (FAST), Goldman Sachs (GS), Delta Airlines (DAL), and Taiwan Semiconductor (TSM).
It’s a busy week of earnings that’s got great potential to deliver a catalyst for the next 5-10% rally in the S&P 500.
Historically, we’d see a lot – and I mean a lot – of “buying-the-rumor” around this time of year, the financial sector alone would usually rally around 8%.
But this year, traders haven’t been so eager.
Nobody is buying anything.
But that doesn’t mean you shouldn’t. From a sentiment perspective, this lack of “buy-the-rumor” activity is actually a good thing for two reasons…
Or two stocks, to be more specific.
