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The Federal Reserve members must be shaking their heads when they look at the current trading volumes in the stock market. For example, today the SPDR S&P 500 Trust (NYSEARCA:SPY) is trading just 23 million shares as of 11:00 am EST. The average trading volume for the SPY in the month of November 2013 is just 104 million shares a day. Last year at this time the SPY averaged 144 million shares traded per day. Now in all fairness, last year the stock market came under some distribution in the first half of November. It should be noted that when the stock market declines the trading volume will usually increase, that did occur last year. But either way, when you consider all of the new issues in the stock market the trading volume is terrible for time of year.
Recently, reports from CNN have stated that investors have poured $277 billion into stock-based mutual funds and exchange traded funds through Oct. 25, 2013. This is supposedly the fastest inflow of capital into stocks since 2000, but why hasn’t the trading volume picked up yet?
Many reports are calling QE-1, 2, and 3 the ultimate bank bailout. This is when the Federal Reserve prints money to buy U.S. Treasury bonds, and mortgage backed securities in order to keep interest rates artificially low. Currently, the central bank is buying $85 billion a month worth of these securities. Meanwhile, the fed funds rate is at zero to a quarter percent. The fed funds rate is the overnight lending rate to the large banks. You see, this is why you earn practically no interest in a savings account at the bank. This hurts everyone on a fixed income, or anyone that saves money.
Many investors can say that the easy money policies by the Federal Reserve saved the entire economic system from collapse in 2009. The easy money has certainly propped asset prices to new all time highs, so I suppose everyone should be happy. However, many people worry that the central bank is just doing more of the same which caused the crisis in the first place. That argument is still open for debate.
The one problem or concern with the stock market is the trading volume. It is often a warning when equities continue to rally in a dull market (light volume market), it is on borrowed time before real downside volume comes in and takes every asset class lower. Only time will tell, but you can bet the Federal Reserve members are watching the dreadful trading volumes very closely. The light volume tells us that only a small group of financial institutions are moving the markets higher. Since the 2009 low, every increase in trading volume has resulted in a sharp decline in the stock markets. Everyone better watch out when the volume returns as the odds favor it will be another decline in stocks and that is not something the central bank wants to see.
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Nicholas Santiago
www.InTheMoneyStocks.com
VisionChina Media Inc. (Nasdaq:VISN)
VISN will report its financial results for the third quarter of 2013 after the U.S. markets close on November 18, 2013.
Shares of VISN skyrocketed $1.80 (or +20.36%) to $10.64 on Friday’s trading session.
For the second quarter of 2013, VISN posted substantial financial improvements, with total revenues of $26.7 million, increased by 56.3% sequentially, and gross profit of $4.5 million compared to gross loss of $5.1 million in the previous quarter.
VISN operates an out-of-home advertising network on mass transportation systems, including buses and subways.
More about VisionChina Media Inc. (Nasdaq:VISN) at www.visionchina.cn
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Crown Equity Holdings Inc. (CRWE)
The increased use of video advertising and also video viewing continued again in 2013 and will increase again and again for the next five or so years according to industry trends.
According to Break Media, video ad spending will reach $5.4 Billion by 2016.
CRWE is looking to deliver value for its stockholders in both the near and long term, and to improve the potential future growth for the company, CRWE is targeting the multi-billion dollar online video-sharing market.
Strategic plans are being developed for CRWE’s Division CRWETube (www.crwetube.com).
As a worldwide online multi-media publisher, CRWE‘s advertising services cover and connect a range of marketing specialties, as well as provide search engine optimization for clients interested in online media awareness. The company launches, invests and manages select businesses, projects and real estate endeavors.
More about Crown Equity Holdings Inc. (CRWE) at www.crownequityholdings.com.
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Biostar Pharmaceuticals, Inc. (Nasdaq:BSPM)
The price of BSPM stock soared $0.48 (or +22.64%) to $2.60 per share after the company reported a substantial improvement on revenues and gross profits in its unaudited financial results
For the third quarter 2013, BSPM posted revenue of $15.01 million, increased by $5.04 million over the same period of the prior year, and gross profits of $6.94 million, a 32.5% increase year over year.
BSPM through its wholly owned subsidiary and controlled affiliate in China, develops, manufactures and markets pharmaceutical and health supplement products for a variety of diseases and conditions.
More about Biostar Pharmaceuticals, Inc. (Nasdaq:BSPM) at www.biostarpharmaceuticals.com
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Tetra Tech Inc. (Nasdaq:TTEK)
Shares of TTEK climbed slightly $0.19 (or +0.66%) to $28.87 on Friday’s market activity. The company was upgraded from Hold to Buy and price target of $32.00 by brokerage firm Brean Capital.
TTEK expects diluted EPS for the first quarter of fiscal 2014 to be in the range of $0.35 to $0.40.
TTEK is a leading provider of consulting, engineering, program management, construction management, and technical services.
More about Tetra Tech Inc. (Nasdaq:TTEK) at www.tetratech.com
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