A respected friend of mine once noted "never short a dull market". I couldn't understand his comment at that time.
What was so different about a dull market versus any other time?
The trick is to understand the players, the motives and the calendar.
1) the players. They are not created equally. Some have more influence on market moves than others. The professional seller will stack as many cards as he can in his favour, that means data and signals. There are notoriously few around low volume days.
2) the motives. The motive for selling is always the assumption that something will go down in price. For that you require a reason or a catalyst. That is unlikely when volume is lower.
3) the calendar. Trust when you are looking forward to a vacation, time away from your screen or about to see Nan for Christmas that you aren't the only person thinking that way. The calendar can play tricks on the stock market uninitiated.
You can look back over a long period of time and rarely do sellers make money over thanksgiving and Christmas. If the market goes your way at these times, be quick to say thank you.
One last note: there are no friends on the other side of your trades! don't think for a moment that the playing field is level, it isn't, so deal with it.
As for today's action, standard operating procedure. Melt ups and rallying high beta at the expense of safety.
Bonds starting to get antsy on Dec Fed meeting. I just don't see them changing tack with only 2 weeks left in the year (funding for year end issues). 2yr paper is the canary in the coalmine, hence a flattening curve.
Bull market trading still.
Potential 2 day melt up around thanksgiving.
Hopefully Mum excels herself once more for our feast on Thursday!
Queen takes Pawn
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