It seems ever week these days is becoming more and more tumultuous. When you have a lot of gray hair mixed with no hair like I do you don’t trade as much on Friday afternoons. Europe is closed, Asia is long closed and half in the bag at a KTV lounge and the market action here is sloppy.
The action today reminds me of a different market and a different time. Late 1999 in reverse. I remember on Fridays back then you could count on the market selling off a little. No one wanted to be long over the week end in case the market had a change of heart. The Street knew that the NASDAQ was overbought. Skateboard.com raising millions of dollars told you that. But, you had to be invested because the momentum up was so strong.
I remember standing in the hog pit in 2002, an old trader said to me “if you had simply bought the close on Friday and sold the open on Monday” for an entire year, you’d have made money trading one lots in the S&P ($ES_F). Conversely he said, “You could have made boat loads of money” buying the open on Monday and selling on Friday without riding a position over the week end. The market was just that strong on the rally.
This market is the reverse. Friday tends to have short covering rallies. No one wants the risk of holding the short over the week end. They are afraid what a central bank might do, or a government might do to stem the market decline. But, if you sell it on Sunday night when Asia opens, and buy it on Friday afternoon when America closes, you have been able to deposit a lot of money in your bank account.
the start of major declines
the next week
made some of your dough back
Then this week a return to trend
In Other News: Law "Enforcer" Eric Holder Understands People's Mistrust of Law Enforcement | Michael Schaus
In Other News: Good News for Mexican Drug Cartels Seeking Some Slightly Used DOJ Hard Drives | Michael Schaus