This Chart Says It’s a Good Time to Buy

|May 3, 2023
Stock market chart with trading desk bank office interior on background.

Forget the Fed.

Forget the banking crisis that “isn’t a crisis.”

There’s a much larger variable in this market. And hardly anybody is talking about it.

It’s something only we volume wonks would pick up on.

Look at the chart…

Trading volume in the ETF market has plunged. April’s figures were half of what we saw in March. The number of shares traded has fallen steadily for nearly 18 months.

ETF Trading Volunme Slumps

Investors are getting tired.

The most obvious rationale for the decline is the rise in interest rates. It’s the same thing that’s taken so many banks down. Rising yields are enticing investors to move their money around. Bonds and CDs are the moneymakers of choice when volatility is high and fixed-income assets are once again providing an actual income.

That’s sucking money out of the market. It’s why things feel a bit boring in stocks lately.

The volatility that traders had become so used to has dried up. There’s far less money sloshing around, jostling prices higher or lower with each half-baked headline.

We’re back to 2019 figures.

But is that a good thing? Or is it a sign of even more trouble to come?

We’re on the record calling for economic trouble… and stock market bliss.

Don’t conflate the two… not in this up-is-down world.

If you recall, late 2019 was no walk in the park. Back then the yield curve was inverted just as it is now. The economically literate expected a recession. And yet stocks were sitting at all-time highs.

It’s more proof that when the average investor is bailing out, it’s time for us to hold our nose and jump in.

We love tracking volume. Big volume spikes give us clues about big news and big activity. Play them right, and we can make some easy money.

But waning volume can be just as appetizing, especially for the long-term investor.

Today’s buyers aren’t fighting the easy-money crowd. They’re not bidding against folks who have pockets stuffed full of freshly printed money. They’re not paying a premium for a subpar product.

Yes, the economy is likely to get shaken further. It’s going to get wild.

That’s why volume is so low.

But the Fed will ease. Congress will stimulate. And the dirty will get cleansed.

Traders will come back. Volume will rise again.

And when it does… you’ll be happy to sell your shares to the herd.

Look closely at the chart above again. You’ll see it doesn’t just show us volume… but also tracks the market’s highs and lows.

January 2022 – right at the peak of the trading frenzy – would have been a fine time to sell.

And right now is a fine time to buy.

Andy Snyder
Andy Snyder

Andy Snyder is an American author, investor and serial entrepreneur. He cut his teeth at an esteemed financial firm with nearly $100 billion in assets under management. Andy and his ideas have been featured on Fox News, on countless radio stations, and in numerous print and online outlets. He’s been a keynote speaker and panelist at events all over the world, from four-star ballrooms to Capitol hearing rooms.