(I am not certain if this is the correct Stack to post this question.)

What structural changes, legislative or otherwise, took place in 2016, such that on Dec 5, 2016, the Trading Capital (Price*Volume) on the SPX suddenly tripled?

Prior to this date, the 200-day moving average on the SPX Trading Capital (Price*Volume) was about 10 million, ± 2 million; then it began increasing around January 2015, and reached 14M on Dec 12, 2015, and sustained $14M until December 5th, 2016.

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Then, quite suddenly, on December 5th 2016 it hit 51M, from 12M the day before, and on Dec 7th, it reached 61M, a level never before reached.

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The Question: What happened? What structural change brought this flow of funds into the S&P?

I am inclined to think that some legislation went into effect in the first few days of December 2016.

As of January 1, 2018, the Trading Capital has reached higher highs, keeping consistently above the 200-day MA. What is keeping the massive flow of funds coming into the US stock market?

Secondary Question: From which Asset Classes is this money coming from?

Per comments below, I am attaching the screenshot from the source.

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The DJI shows a similar phenomenon, on the same date. No surprise there.

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Another chart, this one from Market Watch, just trying to discard the notion that the data is wrong.

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  • $\begingroup$ I suspect a data error. What is the source of this data? How it is calculated? $\endgroup$ – Alex C Feb 21 '18 at 23:48
  • $\begingroup$ I remember see a similar question recently. Does anyone have a link, or am I on drugs? $\endgroup$ – David Addison Feb 22 '18 at 1:57
  • $\begingroup$ @Alex C - The source data is from Fidelity, and it includes Extended Hours. $\endgroup$ – Jorge O-L Feb 22 '18 at 13:53

There was a methodology change in how volume is reported. Now it is using the consolidated tape including trades on all exchanges. See: http://stockcharts.com/articles/dont_ignore_this_chart/2016/12/whats-the-deal-with-that-intraday-volume-on-the-dow-indu.html

  • $\begingroup$ This is it!! -- Thank you much for this. It explains everything. One has to wonder where was all that volume before? $\endgroup$ – Jorge O-L Feb 23 '18 at 15:08

I think this is an error. This is a chart of SPX price and volume I pulled off Bloomberg. The volume does not go up after 12/7/2016 according to this chart.

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  • 2
    $\begingroup$ This does not look like a chart for SPX; SPX has never been at 5600. Maybe Spirax-Sarco Engineering PLC ? $\endgroup$ – Jorge O-L Feb 22 '18 at 20:04
  • $\begingroup$ @JorgeO-L: Good catch. Just changed it to the correct picture. $\endgroup$ – AlRacoon Feb 22 '18 at 20:14
  • $\begingroup$ Here is the SPX chart from Market Watch, which shows the same jump in Volume. marketwatch.com/investing/index/spx/charts $\endgroup$ – Jorge O-L Feb 23 '18 at 14:15
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    $\begingroup$ @Jorge)-L: I see the volume goes up on that day but it is not out of the ordinary in terms of the overall average volume. The OP seems to imply that there was a paradigm shift in SPX trading, whereas all I see is the normal step up in volume associated with options and futures expirations. $\endgroup$ – AlRacoon Feb 23 '18 at 14:29
  • $\begingroup$ If you are looking at the chart you posted, I can understand your remark; but that chart does not reflect the correct data. If we look at Fidelity's or Market Watch's, one cannot conclude that it was "business as usual" at all. It hasn't been "business as usual" ever since. Hence my question. $\endgroup$ – Jorge O-L Feb 23 '18 at 14:46

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