Friday, July 06, 2007

Traders' afternoon

Today is one of those light volume days(Friday of a holiday week, and in the summer) when the only professionals in the market are traders. The real investors are for the most part on the beach, at the pool, or in transit. They have left instructions with their trading desks to lay low unless there is some meaningful market news(and blackberry me if there is) or if a core position offers a real opportunity(and if so buy it or sell it in a small way). What this means is that professional traders who go in and out of the market multiple times a day on individual stocks are now free to play. The market swings up and down and it generally means nothing on Monday. Far be it from ENS to suggest that there are any coordinated buys or sells of indexes or stocks that allow for traders to pick up a wide margin. It is of course just market intuition moving in similar directions. What the light volume means, however, is that with limited risk and smaller bets traders actions can move stocks, especially mid-cap and small-cap stocks, more that a few pips and not have the big institutional players smooth things out. So up and down we go, and it's best just to watch and not try to read anything into the afternoon action -- unless of course there is some meaningful news.

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