Tuesday, November 2, 2010

Another Gap Up

Who are the idiots that sell at the close and buy back at the open 10 handles higher?  We have been getting a lot of these gap ups out of the blue after the previous session had intraday weakness.  The pre-sellers have done their work and now it will be light trading ahead of the midterm elections and the Fed.  There is a very good chance that the Fed will meet market expectations and that should cause a selloff for at least 1 day.  So I will likely look to add short exposure before the meeting looking for immediate weakness after the announcement.  But I don't think that weakness will last long, probably not even past this week. 

Could we rise on the news announcement?  It is possible, but I would only have believed that if we had traded stronger the past 2 weeks.  We've only gone sideways, so I believe it goes lower on the good news.

1 comment:

Anonymous said...

No one is trading right now except HFT's. They are required to close out positions before the close and do not take overnights.