Watch the Close

It's chic to check overnight markets, futures, currency, and so on in order to get a bead on how markets will open. Yea, I've done it myself. Still do, sometimes. But that's typically to sniff out something really major. It's seductive, because you can predict how the market will open with pretty solid accuracy by looking at the futures. But the first hour of trading is regarded by most traders as "amateur hour." Someone said on CNBC this morning that a pro doesn't watch the open, he watches the close. Yep, I can attest that I get a far better read on things by looking at the close. Today was an example of something to pay attention to if you're looking for signs of a short-term reversal such as the end of this recent correction. First, you've got a huge up day. Second, it began up, drove up hard, took a breather for lunch in NY, and recommenced for the remainder of the day, actually accelerating into the close. Very opposite of Friday where the market posted good gains but couldn't hold them. Traders didn't want to stay long over the weekend (opening gaps down can be brutal in declining...

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Richard Nikoley

I'm Richard Nikoley. Free The Animal began in 2003 and as of 2021, contains 5,000 posts. I blog what I wish...from health, diet, and food to travel and lifestyle; to politics, social antagonism, expat-living location and time independent—while you sleep—income. I celebrate the audacity and hubris to live by your own exclusive authority and take your own chances. Read More
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