by Jason Bodner

January 10, 2023

With a New Year upon us, I’m going to give you a useful tip: Hydrate. A new study from the National Institutes of Health looked at data of 11,000 people for more than 30 years. The study found that those who drank more water had fewer chronic diseases and lived longer. I suppose it shouldn’t be surprising – but ask yourself: Do you really drink enough water? I bet the answer is “no” for most of us.

Hang on, I need to grab a glass of water….

Here’s another useful tip: Stop looking at the market’s daily gyrations. I’ll bet a similar study to the 30-year water study would show that those who don’t watch the market each hour also live longer.

So far this year (and the back half of December) would be enough to give anyone heartburn. Many questions loom over our collective global heads: When will the Ukrainian war end? Is America in a recession or not? Will rates stop rising? Will this be a miserable year? Many investors seem to seek answers to these long-term by looking at the tape all day. And so far, through Thursday, this year has been volatile and ugly. As of this writing, the SPY (S&P 500 tracking ETF) is flat on the year.

(P.S. Friday was strong, which goes to show you the pointlessness of watching any short-term trend.)

Let’s dig a little under the hood and see what’s really going on. First, we will look at the anemic volumes.

Here’s a table of daily volumes of the SPY. Yahoo Finance uses a three-month average volume as their benchmark. For the SPY that’s nearly 87 million shares a day. What’s plain to see is that since December 15th (after Fed Chair Powell spoke on the 14th) there have been only two of 14 trading days where volume exceeded average. Unfortunately, both those days were down days, as the market didn’t like what Powell had to say. But you can clearly see, that volume is below average, in some cases significantly below:

S&P 500 Table

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Next up, I will show you a chart of unusual trading. MAPsignals looks at volumes that are out of the ordinary. The following chart displays all unusually large trades in the aggregate for any given day as an amber bar. We can see that it tells the same story: No big volumes to speak of, aside from the 16th of December, which was post Powell and a huge options expiry which normally sees volume spikes.

Big Money Trading Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Finally, to reinforce the weak volume observations: here’s a snapshot of the unusual buying and selling by market cap. Ordinarily to start the year, trading is usually high volume as managers reposition for the coming year. This year, not so much. This chart shows 284 total signals through four trading days. The daily average of signals since 2005 is roughly 100. So, this chart indicates unusual buying and selling volume is 75% of the 17-year average. Again- we should expect more volume to start January – not less.

Big Buying-Selling Market Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Finally, we can see the volumes as anemic in both the stock and ETF buys and sells. Look how since mid-December volumes have dwindled:

Big Buys-Sells ETF Charts

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

This low volume paves the way for volatility and big bid-offer spreads on stocks and especially ETFs.

Who could possibly be happy about that? I mean who can make money in that environment?

The answer is clear:

This is Who Profits from Low Volume and Wide Bid/Offer Spreads

Citadel News Clip

Citadel can serve as a proxy for all hedge funds and prop-shops engaged in algorithmic trading. There are hundreds collectively managing $100s of billions of dollars. Algos trade like crazy when volumes are thin because they specifically profit off capturing the bid offer spread – the distance between where you can buy a security or sell it. They specialize in market making and win this game by knowing what you – the retail investor – are going to do before you do it!

Those apps and brokerages that offer no commission trading are great, right? You get to trade for free all day long! But there’s no free lunch. There’s always a fee to be paid. In the case of “commission-free” trading, you pay with the information that your order flow gives the trader.

People like the aforementioned giant hedge fund(s) buy the order flow information. They can see when there is stock to buy or sell. They can then – within nanoseconds – rush in front of your order, buy the stock, and sell it back to you slightly higher. They can do this with no human interaction, fully legally, and do so all day long. They act so fast that one second is like a full trading day to these algos.

The point here is that not all investors are unhappy with markets like these.

The bottom line is that everyday investors – normal investors – don’t enjoy choppy markets. They wonder how low we will go on with such chaos. They wonder if they should stay in. It causes stress and anxiety. But this state of affairs will not clear up until there is a little more clarity on the war against inflation, interest rate parity, and whether or not any recession would be short lived or not.

Friday’s price action was very strong on economic data that came out, such as Friday’s non-farm payrolls number, which came in hotter than expected, adding 223,000 jobs vs. +202,000 expected. Unemployment was also better than expected at 3.5% vs. 3.7% expected. But the market really began to rally on wage data: Average hourly earnings, month-over-month was +0.3% vs. +0.4% – lower than expected, while year-over-year was +4.6% vs. +5.0% – also lower than expected.

This data should ease some of the Fed’s concerns on the tight labor market.

Again – we live in bizarro world. Any data showing economic slowing as a result of a successful war against inflation is good for stocks. Hence the sizeable rally (as I write this.)

The key here is that when volumes are thin, it’s a “cat’s away, mice will play” situation. High-frequency traders and algo will continue to mint money in conditions optimal for them to do so. Those conditions are usually the ones that give “normal” investors heartburn. If this relief rally holds and there is some good volume behind it, that can be constructive for a near-term rally in stocks.

That might make us all feel better and give some needed relief.

As Lily Tomlin said, “For fast-acting relief try slowing down.”

All content above represents the opinion of Jason Bodner of Navellier & Associates, Inc.

Please see important disclosures below.

About The Author

Jason Bodner

Jason Bodner writes Sector Spotlight in the weekly Marketmail publication and has authored several white papers for the company. He is also Co-Founder of Macro Analytics for Professionals which produces proprietary equity accumulation/distribution research for its clients. Previously, Mr. Bodner served as Director of European Equity Derivatives for Cantor Fitzgerald Europe in London, then moved to the role of Head of Equity Derivatives North America for the same company in New York. He also served as S.V.P. Equity Derivatives for Jefferies, LLC. He received a B.S. in business administration in 1996, with honors, from Skidmore College as a member of the Periclean Honors Society. All content of “Sector Spotlight” represents the opinion of Jason Bodner

Important Disclosures:

Jason Bodner is a co-founder and co-owner of Mapsignals. Mr. Bodner is an independent contractor who is occasionally hired by Navellier & Associates to write an article and or provide opinions for possible use in articles that appear in Navellier & Associates weekly Market Mail. Mr. Bodner is not employed or affiliated with Louis Navellier, Navellier & Associates, Inc., or any other Navellier owned entity. The opinions and statements made here are those of Mr. Bodner and not necessarily those of any other persons or entities. This is not an endorsement, or solicitation or testimonial or investment advice regarding the BMI Index or any statements or recommendations or analysis in the article or the BMI Index or Mapsignals or its products or strategies.

Although information in these reports has been obtained from and is based upon sources that Navellier believes to be reliable, Navellier does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute Navellier’s judgment as of the date the report was created and are subject to change without notice. These reports are for informational purposes only and are not a solicitation for the purchase or sale of a security. Any decision to purchase securities mentioned in these reports must take into account existing public information on such securities or any registered prospectus.To the extent permitted by law, neither Navellier & Associates, Inc., nor any of its affiliates, agents, or service providers assumes any liability or responsibility nor owes any duty of care for any consequences of any person acting or refraining to act in reliance on the information contained in this communication or for any decision based on it.

Past performance is no indication of future results. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. It should not be assumed that any securities recommendations made by Navellier. in the future will be profitable or equal the performance of securities made in this report. Dividend payments are not guaranteed. The amount of a dividend payment, if any, can vary over time and issuers may reduce dividends paid on securities in the event of a recession or adverse event affecting a specific industry or issuer.

None of the stock information, data, and company information presented herein constitutes a recommendation by Navellier or a solicitation to buy or sell any securities. Any specific securities identified and described do not represent all of the securities purchased, sold, or recommended for advisory clients. The holdings identified do not represent all of the securities purchased, sold, or recommended for advisory clients and the reader should not assume that investments in the securities identified and discussed were or will be profitable.

Information presented is general information that does not take into account your individual circumstances, financial situation, or needs, nor does it present a personalized recommendation to you. Individual stocks presented may not be suitable for every investor. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. Investment in fixed income securities has the potential for the investment return and principal value of an investment to fluctuate so that an investor’s holdings, when redeemed, may be worth less than their original cost.

One cannot invest directly in an index. Index is unmanaged and index performance does not reflect deduction of fees, expenses, or taxes. Presentation of Index data does not reflect a belief by Navellier that any stock index constitutes an investment alternative to any Navellier equity strategy or is necessarily comparable to such strategies. Among the most important differences between the Indices and Navellier strategies are that the Navellier equity strategies may (1) incur material management fees, (2) concentrate its investments in relatively few stocks, industries, or sectors, (3) have significantly greater trading activity and related costs, and (4) be significantly more or less volatile than the Indices.

ETF Risk: We may invest in exchange traded funds (“ETFs”) and some of our investment strategies are generally fully invested in ETFs. Like traditional mutual funds, ETFs charge asset-based fees, but they generally do not charge initial sales charges or redemption fees and investors typically pay only customary brokerage fees to buy and sell ETF shares. The fees and costs charged by ETFs held in client accounts will not be deducted from the compensation the client pays Navellier. ETF prices can fluctuate up or down, and a client account could lose money investing in an ETF if the prices of the securities owned by the ETF go down. ETFs are subject to additional risks:

  • ETF shares may trade above or below their net asset value;
  • An active trading market for an ETF’s shares may not develop or be maintained;
  • The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track;
  • The cost of owning shares of the ETF may exceed those a client would incur by directly investing in the underlying securities; and
  • Trading of an ETF’s shares may be halted if the listing exchange’s officials deem it appropriate, the shares are delisted from the exchange, or the activation of market-wide “circuit breakers” (which are tied to large decreases in stock prices) halts stock trading generally.

Grader Disclosures: Investment in equity strategies involves substantial risk and has the potential for partial or complete loss of funds invested. The sample portfolio and any accompanying charts are for informational purposes only and are not to be construed as a solicitation to buy or sell any financial instrument and should not be relied upon as the sole factor in an investment making decision. As a matter of normal and important disclosures to you, as a potential investor, please consider the following: The performance presented is not based on any actual securities trading, portfolio, or accounts, and the reported performance of the A, B, C, D, and F portfolios (collectively the “model portfolios”) should be considered mere “paper” or pro forma performance results based on Navellier’s research.

Investors evaluating any of Navellier & Associates, Inc.’s, (or its affiliates’) Investment Products must not use any information presented here, including the performance figures of the model portfolios, in their evaluation of any Navellier Investment Products. Navellier Investment Products include the firm’s mutual funds and managed accounts. The model portfolios, charts, and other information presented do not represent actual funded trades and are not actual funded portfolios. There are material differences between Navellier Investment Products’ portfolios and the model portfolios, research, and performance figures presented here. The model portfolios and the research results (1) may contain stocks or ETFs that are illiquid and difficult to trade; (2) may contain stock or ETF holdings materially different from actual funded Navellier Investment Product portfolios; (3) include the reinvestment of all dividends and other earnings, estimated trading costs, commissions, or management fees; and, (4) may not reflect prices obtained in an actual funded Navellier Investment Product portfolio. For these and other reasons, the reported performances of model portfolios do not reflect the performance results of Navellier’s actually funded and traded Investment Products. In most cases, Navellier’s Investment Products have materially lower performance results than the performances of the model portfolios presented.

This report contains statements that are, or may be considered to be, forward-looking statements. All statements that are not historical facts, including statements about our beliefs or expectations, are “forward-looking statements” within the meaning of The U.S. Private Securities Litigation Reform Act of 1995. These statements may be identified by such forward-looking terminology as “expect,” “estimate,” “plan,” “intend,” “believe,” “anticipate,” “may,” “will,” “should,” “could,” “continue,” “project,” or similar statements or variations of such terms. Our forward-looking statements are based on a series of expectations, assumptions, and projections, are not guarantees of future results or performance, and involve substantial risks and uncertainty as described in Form ADV Part 2A of our filing with the Securities and Exchange Commission (SEC), which is available at or by requesting a copy by emailing All of our forward-looking statements are as of the date of this report only. We can give no assurance that such expectations or forward-looking statements will prove to be correct. Actual results may differ materially. You are urged to carefully consider all such factors.

FEDERAL TAX ADVICE DISCLAIMER: As required by U.S. Treasury Regulations, you are informed that, to the extent this presentation includes any federal tax advice, the presentation is not written by Navellier to be used, and cannot be used, for the purpose of avoiding federal tax penalties. Navellier does not advise on any income tax requirements or issues. Use of any information presented by Navellier is for general information only and does not represent tax advice either express or implied. You are encouraged to seek professional tax advice for income tax questions and assistance.

IMPORTANT NEWSLETTER DISCLOSURE:The hypothetical performance results for investment newsletters that are authored or edited by Louis Navellier, including Louis Navellier’s Growth Investor, Louis Navellier’s Breakthrough Stocks, Louis Navellier’s Accelerated Profits, and Louis Navellier’s Platinum Club, are not based on any actual securities trading, portfolio, or accounts, and the newsletters’ reported hypothetical performances should be considered mere “paper” or proforma hypothetical performance results and are not actual performance of real world trades.  Navellier & Associates, Inc. does not have any relation to or affiliation with the owner of these newsletters. There are material differences between Navellier Investment Products’ portfolios and the InvestorPlace Media, LLC newsletter portfolios authored by Louis Navellier. The InvestorPlace Media, LLC newsletters contain hypothetical performance that do not include transaction costs, advisory fees, or other fees a client might incur if actual investments and trades were being made by an investor. As a result, newsletter performance should not be used to evaluate Navellier Investment services which are separate and different from the newsletters. The owner of the newsletters is InvestorPlace Media, LLC and any questions concerning the newsletters, including any newsletter advertising or hypothetical Newsletter performance claims, (which are calculated solely by Investor Place Media and not Navellier) should be referred to InvestorPlace Media, LLC at (800) 718-8289.

Please note that Navellier & Associates and the Navellier Private Client Group are managed completely independent of the newsletters owned and published by InvestorPlace Media, LLC and written and edited by Louis Navellier, and investment performance of the newsletters should in no way be considered indicative of potential future investment performance for any Navellier & Associates separately managed account portfolio. Potential investors should consult with their financial advisor before investing in any Navellier Investment Product.

Navellier claims compliance with Global Investment Performance Standards (GIPS). To receive a complete list and descriptions of Navellier’s composites and/or a presentation that adheres to the GIPS standards, please contact Navellier or click here. It should not be assumed that any securities recommendations made by Navellier & Associates, Inc. in the future will be profitable or equal the performance of securities made in this report.

FactSet Disclosure: Navellier does not independently calculate the statistical information included in the attached report. The calculation and the information are provided by FactSet, a company not related to Navellier. Although information contained in the report has been obtained from FactSet and is based on sources Navellier believes to be reliable, Navellier does not guarantee its accuracy, and it may be incomplete or condensed. The report and the related FactSet sourced information are provided on an “as is” basis. The user assumes the entire risk of any use made of this information. Investors should consider the report as only a single factor in making their investment decision. The report is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a security. FactSet sourced information is the exclusive property of FactSet. Without prior written permission of FactSet, this information may not be reproduced, disseminated or used to create any financial products. All indices are unmanaged and performance of the indices include reinvestment of dividends and interest income, unless otherwise noted, are not illustrative of any particular investment and an investment cannot be made in any index. Past performance is no guarantee of future results.