Oct
12
Gymnasiums and Trading, by Steve Leslie
October 12, 2006 |
I used to be a member of the largest athletic club here in my city. One thing I noticed is that the greatest attendance at the club was unquestionably on Monday. I suspect this was due to the couch potatoes after a long weekend in front of their TV screens watching sports and consuming large quantities of alcohol and trans fat laden foods, venturing out and cramming a weeks workout into an hour and a half. As the week progressed attendance would drop consistently until Friday came when there was but a few diehards left who were working out. If Friday was the last workday before a 3 day weekend forget it the gym looked like a ghost town. Also the peak hours of workout were from 5pm to 7pm. The aerobics classes were completely full and it was elbow to elbow. If you wanted to lift weights you had to share your bench with another. Furthermore, January was the highest attendance month and December the weakest. Naturally the Summer months June to August were thin.
When I was a broker, we did most of our commissions on Monday as much as 60 percent and by Friday noon our work week had effectively ended. Plus most of our commissions were generated in the morning rather than the afternoon.
I see similar phenomenon at work in the U.S. Stock markets. Whereas Monday mornings are the most hectic and Friday afternoon the most benign. 9:30am until 10:45 am are the most active, 12pm to 2:30pm appear to be listless until the lunch bunch returns to balance their books for the day.
I am sure there are fundamental reasons for this. As a speculator and swing trader, I would be very interested in hearing from the list their comments and observations, methods they use to exploit this and perhaps an article or paper that would support this thesis. It would seem to me that timing as to purchases and sales or securities would then be taken into consideration as to when one would consider and consummate them.
One theory in particular is to buy the S&P near the end of the month and hold it for the following 4 trading days. Are there others?
Jeff Sasmor responds:
I use NY Sports club in NY. Trainers there have commented to me that they see a lot of new members in January because of New Year's resolutions. They usually attend for a while then stop coming — they generally have signed up for long-term contracts because they in good faith felt that they would keep going for their own good.
Perhaps daily-ness in the stock market is similarly tied to emotions. Maybe a lot of people sign into their Ameritrade and Schwab accounts on Sunday and place buy and sell orders to execute in a vast swath at 9:30 AM on Monday. This isn't exploitable. Unless you work at one of these brokerages…
But to depend on such patterns could be fallacious as they (in my limited experience) seem to shift, advance, and precess. One doubts that the oft-related scheme of buying near the end of the month and holding a few days is reliable (I am sure someone will tell me I haven't tested this but I think that this has been previously debunked on the spec-list).
There are definitely intra-day patterns, lulls, rushes, and so on but these are of no use to you unless you want to day trade (and Dr. LACK will probably try to talk you out of it).
Getting back to gym-going: at our gym each machine has a little LCD TV hooked up to cable TV. I have found that if I am watching Bloomberg or CNBC (yes, I know) then people will come up to you and ask your opinion of the market. Yep. I have only one answer for them.
Ryan Carlson replies:
A lesson I learned early on at the Merc is that pretty much the only ones trading on Friday afternoons are guys who lost money and are trying to make it back. Anyone that's had a good day is gone by lunch and at either the gym, playing golf or the CME Merc Club drinking. Sure, it applies to most other days as well but especially Fridays.
Perhaps it's easier to gun at other's bad positions on a Friday afternoon but the killer instinct in most is generally gone after 4 1/2 days of trading.
Comments
WordPress database error: [Table './dailyspeculations_com_@002d_dailywordpress/wp_comments' is marked as crashed and last (automatic?) repair failed]
SELECT * FROM wp_comments WHERE comment_post_ID = '487' AND comment_approved = '1' ORDER BY comment_date
Archives
- January 2021
- December 2020
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- December 2019
- November 2019
- October 2019
- September 2019
- August 2019
- July 2019
- June 2019
- May 2019
- April 2019
- March 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- April 2016
- March 2016
- February 2016
- January 2016
- December 2015
- November 2015
- October 2015
- September 2015
- August 2015
- July 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- January 2015
- December 2014
- November 2014
- October 2014
- September 2014
- August 2014
- July 2014
- June 2014
- May 2014
- April 2014
- March 2014
- February 2014
- January 2014
- December 2013
- November 2013
- October 2013
- September 2013
- August 2013
- July 2013
- June 2013
- May 2013
- April 2013
- March 2013
- February 2013
- January 2013
- December 2012
- November 2012
- October 2012
- September 2012
- August 2012
- July 2012
- June 2012
- May 2012
- April 2012
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- May 2009
- April 2009
- March 2009
- February 2009
- January 2009
- December 2008
- November 2008
- October 2008
- September 2008
- August 2008
- July 2008
- June 2008
- May 2008
- April 2008
- March 2008
- February 2008
- January 2008
- December 2007
- November 2007
- October 2007
- September 2007
- August 2007
- July 2007
- June 2007
- May 2007
- April 2007
- March 2007
- February 2007
- January 2007
- December 2006
- November 2006
- October 2006
- September 2006
- August 2006
- Older Archives
Resources & Links
- The Letters Prize
- Pre-2007 Victor Niederhoffer Posts
- Vic’s NYC Junto
- Reading List
- Programming in 60 Seconds
- The Objectivist Center
- Foundation for Economic Education
- Tigerchess
- Dick Sears' G.T. Index
- Pre-2007 Daily Speculations
- Laurel & Vics' Worldly Investor Articles