Turnaround Tuesday?
Mondays are often tough days on Wall Street. The weekend may bring bad news and investors panic and exit on Monday. If the market has been weak, and it has, larger investors may have cashed up on Friday (selling into a Friday close is common when the market is misbehaving). These larger investors will hold off buying on Monday, just to see where the market is going. Funds managers may also close out positions on Friday, so they have cash available for investors who decide they want to exit over the weekend. When you have a weak market you do not even need really bad news, just a few weak market indicators. Just an absence of good news, really, and Mondays can continue the slide.
On Tuesdays, however, investors may start to get back in to try and lock in Mondays lower prices. Tuesday is statistically the strongest day of the week. The question is, will we get one tomorrow? And if we do, will it hold? Are we at a bottom yet? No way to tell.
Personally, this downturn does not feel done. There is still a lot of overvalued stocks and Washington’s bad behavior is depressing (and confounding) any sane business person. There is no leadership or plan so business is flying blind. The politicians have lost the plot, the fact they are playing chicken with the debt limit just shows they are less concerned about what is good for America than they are with their own petty bickering. Both parties, particularly their extremist wings, are undermining the businesses that have made America what it is.
If we get a Tuesday turnaround, do not rush in. The market just does not feel done yet. It is not scientific, or even logical, but caution in the byword for now.
Market Today: Not selling puts. Closing calls, the few that I have left. I did all of three trades today rather than my normal 10-20. I do write calls whenever there is bump up (if Turnaround Tuesday is true to its name I will be selling calls), Options are especially good to write now as the market’s volatility has pushed the premiums on options higher. I am looking to buy some of the big cap tech stocks, like AAPL and MSFT but want them down at least 15-20%; they are not quite there. Yet. I have a shopping list and once we hit 15% down I will start b.