Low Volume Let's Algos Run Wild

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Our View

My call to buy the 15 to 25-point dips worked yesterday, but the ES and NQ got hit by a wave of sell programs after 2:00 when the Treasury funding announcement headline hit the tape.

Sometimes I just think there is too much to keep up with and I have no idea how or why an announcement about a future Treasury auction could have such an impact, but when the volumes are so low, it seems like the algos will lock on to any headline. 

Most of the early tech weakness came from NVDA when it sold off into 10:00 when it dropped $20.00. But then it recovered and made a new high for the day at $879.92 after the 4:00 cash close. TSLA zoomed higher by more than 15% after Elon Musk made headway in China for the rollout of the company’s “FSD” autonomous driving service. And the benchmark 10-year yield drifted downward Monday to 4.612%, but remains 0.752 percentage points higher since the beginning of 2024 (up about 16% YTD). 

All in all, it was not a bad day for the markets.