I Was Promised Way More Chocolate

volume

We are winding down our stay in Germany and will be flying back on Wednesday morning. If you haven’t been to Germany before, don’t get your information from The Simpsons. It is not the “Land of Chocolate” as Homer Simpson once dreamt.

But we did receive a remarkable tour of this fine country from our publisher. I do plan to return to Bonn, as it is very difficult to describe the joy of dining and conversing among friends along the Rhine river.

Infrastructure Interest

As we conclude in Frankfurt, there were no train mishaps. And I did have a bit of time to catch up on my reading. Today, the Senate passed the first round of the infrastructure bill. I’m not sure anyone is really reading this thing.

It was more than 2,500 pages long. And it includes new laws that would mandate alcohol breathalyzers in new cars and cockpit cameras. The goal is to cut down on drunk driving, which is responsible for about one-third of all traffic fatalities. Shares of Lifeloc Technologies (OTC:LCTC), a company that makes breathalyzers, rallied as much as 25% today.

But my issue with the news is the mandated camera in the car. Does the government really want to film me singing? After all, that’s the only quiet place I have left with my wife constantly nervous about COVID and my three-year-old at home running around. Where am I supposed to go to be alone? A treehouse?

Here’s the Markets Big Volume Issue

I have been asked why broader market momentum remains negative in the market. The answer is quite easy to understand. This map below offers a glimpse of what is happening with one-day volumes compared to their average.

The darker the color around a stock, the lower the volume has been compared to recent history. We have mega-cap stocks like Microsoft and Alphabet well below their normal trading volumes. Facebook was at nearly half its traditional volume. And these are the BIG stocks.

Go further down the ladder into the smaller-cap stocks and you’ll find even greater weakness. Right now, about 55% of all stocks (7,500 in total) are trading below their 50-day moving average. It is stuck in a rut. Buying pressure is subdued and there just isn’t a lot of activity right now.

I’m expecting that there will be a shakeout at some point. Perhaps we’ll start to look at that October period as the correction target. At that point, expect a buying frenzy. I’ll be back on the plane tomorrow, but I’ll look for a value stock pick for you this evening.

Garrett Baldwin
Garrett Baldwin
Garrett Baldwin joined Godesburg Financial Publishing as Chief U.S. Markets Analyst in early 2021. A Johns Hopkins-trained Economist, he’s worked with hedge funds, venture capital firms, angel investors, and economic advisors to the U.S. government. Baldwin specializes in market anomalies and alternative investments. He’s written extensively on momentum, value, insider buying, and other unique strategies that provide investors that elusive edge.
Garrett Baldwin
Garrett Baldwin
Garrett Baldwin joined Godesburg Financial Publishing as Chief U.S. Markets Analyst in early 2021. A Johns Hopkins-trained Economist, he’s worked with hedge funds, venture capital firms, angel investors, and economic advisors to the U.S. government. Baldwin specializes in market anomalies and alternative investments. He’s written extensively on momentum, value, insider buying, and other unique strategies that provide investors that elusive edge.

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