This week the Dow Jones closed at new all-time highs every day except for Tuesday; the 96th to 99th since the November 2016 presidential election.  Of January’s eighteen NYSE trading sessions, eleven of them closed with the Dow Jones at a new all-time high.

The drama of this advance can’t properly be displayed on a BEV chart; not with every new all-time high being equal to Zero. However, looking at the table listing Dow Jones Corrections, the Dow Jones would have to decline by just under 4,000 points to see a 15% correction, and the Dow Jones would still be over 22,500.  Not that the bulls care, and why should they when they’re making money?

But I care. Look at the Dow Jones with its 52Wk High and Low plots below. Since February 2016 the Dow Jones has done nothing but advance. And since November 2016, distinguishing the Dow Jones plot (Blue) from its green 52Wk High plot has become impossible.

Look at the Dow Jones Total Market Group’s (DJTMG) 52Wk Highs and Lows in the table below. The week closed with 44 of the 76 groups at new 52Wk Highs, and we have to go down to #71 to see a double-digit percentage decline from a 52Wk High.  And how in the hell does Retail Broadline become the #1 in the list?  From what I read in the media, even Wal-Mart is hurting from Amazon’s aggressive expansion into retail.

Here’s the DJTMG’s 52Wk High – Low nets.  Two weeks ago it registered a big +56. The problem I have with that is with a geriatric market advance, such as ours, it shouldn’t have the energy to make a serious attempt to take out a high from five years ago; the +63 seen in May 2013.  

What’s missing is seen in the Dow’s BEV chart above, a post March 2009 major market decline of say -25% or even more. This advance’s largest decline for the Dow Jones has seen was way back in September 2011, of only 16%, not that the bulls care.

Still, for all the strange things happening in the stock market, we’re looking at history being made. Like oddities in trading volume whose explanations aren’t ever going to come into the light of day unless we get the FOMC to testify under oath. And even then their interlocutors may have to waterboard a few of the “policy makers” to stop them from lying.  Anyway, let’s look at trading volume in the stock market.

What makes anything, including NYSE share prices go up? Rising demand (rising trading volume), just as falling demand (falling trading volume) results in declining valuations. This is simple to understand; how in the chart below NYSE trading volume’s 100 day M/A peaked in December 1929 near the top of the Dow Jones itself (September 1929), and crashed down with the Dow Jones as investors walked away, taking their losses with them during the depressing 1930’s.  

Like the Dow Jones itself, NYSE trading volume saw three bear market bottoms from 1932 to 1942, with the blue plot being a BEV plot, and the red plot displaying the millions of shares traded daily in the 100 day moving average.  

Note:  After the December 1929’s last all-time high in the selected data, the red millions of shares plot overlays the blue BEV plot.  So after December 1929, the red plot can be used for both BEV values (Left Scale) and millions of shares (Right Scale).

FYI: On 29 October 1929, after a two day 25% decline in the Dow Jones, the NYSE saw panic selling resulting in 16.41 million shares traded.  They called it “Black Tuesday.”  NYSE trading volume would not exceed Black Tuesday’s until 01 April 1968 (17.73 million shares). I make note of this as the 100 day M/A used in the chart below smooths over this historical fact.

The point to take away from this chart is that bear-market bottoms are painfully illiquid; lots of desperate sellers and only a few disinterested buyers.

But this relationship between supply and demand (Dow Jones’ valuation and Trading Volume) hasn’t been the case at all since January 2000, the top of Greenspan’s NASDAQ bubble market until after the November 2016 election. Rather, the bear-market bottoms for the NASDAQ & Sub-Prime Mortgage (Credit Crisis) market declines occurred with historic “liquidity” flooding into the stock market.

The data below is indexed to January 1980 =1.00, and in the next twenty years as the bull market on Wall Street gathered momentum, as expected trading volume for the NYSE (Red Plot) and volume for the Dow Jones itself (Blue Plot) increased by double digit factors by January 2000. But what is entirely unexpected is how trading volume for both NYSE, and most especially for the Dow Jones, peaked at record highs at the bottom of the High-Tech and Sub-Prime bear markets. I have NYSE trading volume going back to January 1900, and in the past 118 years, there has been nothing like what we see below at the Red and Green Stars.

Oh, it gets worse. The Dow Jones began its March 2009 advance, our current advance as trading volume collapsed – crashing demand (Blue Plot).  And so it went until after Trump’s November 2016 election victory, when for the first time in seventeen years the Dow Jones advanced on rising volume, as NYSE trading volume contracted slightly. But the post November 2016 advancing trading volume for the Dow Jones still looks oddly out of place. Its 40Wk M/A looks as if someone used a straight edge to draw it on the chart.