The Algo's LOVE Half Trading Days
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Did a little research on half trading days. Ever since we've become more volatile back in the beginning of 2018, there has been three days that the market closed early. (Before the 4th, after Thanksgiving, and before Christmas.
Half days obviously mean roughly "half" the volume. Algo's don't celebrate Holliday's....just looks like a down volume day. Here's what happened on those last three dates.
July 3rd: The market was in about a 5% correction. It actually broke below the rising wedge. The day before was a bounce. July 3rd was a sell-off, but new lows were NOT made and there was NOT much volume at all. Being that breakouts and breakdowns are so volume driven, this was looked at as...no volume to push this thing lower...means we're ready to buy the dip and go higher. (The market did just that)
November 23rd: The market was in the midst of consolidating that big October sell-off. The market was sitting on a major trendline, it actually sat there and closed below it, but again NO VOLUME. No volume to break the trendline = we're going back up. (As we did temporarily)
December 24th: The last day of the major December sell-off. This one still has me a little tripped up, because bottoms don't end on no volume. They usually get a panick sell finish. None the less, there was a lot of volume this day, it was just a half day so it appears there wasn't any. Low volume and oversold conditions, we were poised for a big bounce.
The big question now becomes, what happens this time? Every single one of these cases came after 5%+ sell-offs and acted as a pivot. Unless the market crashes Monday, that's not happening this time.
What could happen:
Gap up near all time highs Monday. Tuesday we try to break them, close the day on "no volume", and the tape now says "new highs were attempted to be made, with no volume, which means rejection...sell...sell..sell.? Bear in mind this is an observation only, 3 instances where the market reacted from a half trading day is far from any form of accurate indicator, but it's something to keep an eye on.
Half days obviously mean roughly "half" the volume. Algo's don't celebrate Holliday's....just looks like a down volume day. Here's what happened on those last three dates.
July 3rd: The market was in about a 5% correction. It actually broke below the rising wedge. The day before was a bounce. July 3rd was a sell-off, but new lows were NOT made and there was NOT much volume at all. Being that breakouts and breakdowns are so volume driven, this was looked at as...no volume to push this thing lower...means we're ready to buy the dip and go higher. (The market did just that)
November 23rd: The market was in the midst of consolidating that big October sell-off. The market was sitting on a major trendline, it actually sat there and closed below it, but again NO VOLUME. No volume to break the trendline = we're going back up. (As we did temporarily)
December 24th: The last day of the major December sell-off. This one still has me a little tripped up, because bottoms don't end on no volume. They usually get a panick sell finish. None the less, there was a lot of volume this day, it was just a half day so it appears there wasn't any. Low volume and oversold conditions, we were poised for a big bounce.
The big question now becomes, what happens this time? Every single one of these cases came after 5%+ sell-offs and acted as a pivot. Unless the market crashes Monday, that's not happening this time.
What could happen:
Gap up near all time highs Monday. Tuesday we try to break them, close the day on "no volume", and the tape now says "new highs were attempted to be made, with no volume, which means rejection...sell...sell..sell.? Bear in mind this is an observation only, 3 instances where the market reacted from a half trading day is far from any form of accurate indicator, but it's something to keep an eye on.
Uwaga
Wednesday not Tuesday ***
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