Christmas-level volume hiding explosive breakout
| | | Don Kaufman here. | 850,000. | That's how many S&P contracts traded yesterday. You have to go back literally to Christmas -- a half trading session -- to find volume that crappy. | While you were reading headlines about "stocks tick higher on trade optimism," the market just posted record-breaking low volume. Dead as a doornail during regular hours. | Then last night happened. | This "dead" market moved 50 points while you were sleeping. From 6040 all the way down to 5991 and back up. The Nasdaq? 250-point range overnight. | Holy crap, these are big moves. Just not during your market hours. | The Garbage News Distraction | You know what was actual news today? The Chinese delegate left for lunch. Had his meal outside the building. | I can't even make that up. That was in the wire this morning. | The marketplace is hooked on this juice -- every step these trade negotiators take gets reported like it's market-moving information. Commerce Secretary Lutnick says talks are "going well" and we're supposed to care. | But here's the thing: a framework deal is already baked in. Of course they're gonna say there's progress. They can't come out with anything less. | What 850,000 Contracts Really Means | When you see Christmas-level volume during regular hours followed by institutional hedging activity overnight, that's not coincidence. | That's positioning. | The volume spikes started right around 6024 -- basically where we're trading right now. For the first time in overnight trade, we definitively broke outside the volatility box with heavy volume. | When that hedging activity kicks in, it triggers other algorithms. Boom -- we traded right to 6040 in no time. | We started the week with a $90 expected move. Where are we? We started Monday at 6000, we're at 6017. That's not grinding higher, that's dribbling. | But the structure underneath? That's screaming. | | | | Here's Your Play | Most traders see low volume and think nothing's happening. Smart money sees low volume followed by overnight institutional moves and knows something's brewing. | If we break above 6030 -- only 6 points higher than current levels -- you ride that thing to 6040. | That's 10-15 S&P points while everyone else is reading lunch reports from London. | If we break below current support, this thing falls just as fast. The key is the volume pattern tells you when big money is moving. | Right now you're sitting at 6024. That's where the overnight volume spikes started. You bid just a little higher and we're off to the races. | When there's nothing going on during regular hours, collecting 10 S&P points? That's your entire day. | Don't Get Fooled by the Calm | The marketplace can't get out of its own way right now. But when information starts to break -- and it will -- you better be positioned. | Because this dead volume isn't telling you nothing's happening. | It's telling you exactly when the big move comes. | While retail traders get lulled to sleep by record low volume, institutional money is already positioned. They're not trading headlines about lunch meetings. | They're trading structure. And right now the structure says we're sitting on a powder keg. | 6030 is your trigger. Volume confirms your entry. | Don't let Christmas-level volume fool you into thinking the market's dead. | Use it to see what's really happening underneath. | To your success, | Don Kaufman | P.S. Speaking of Christmas, for some traders it's already here. If you don't know what I'm talking about…here's what you need to know. | | | | | |
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