Page 484 - THE MARKET WHISPERER

480 PART 15 - Special Occasions, Special Rules

Note Market Behavior on a Typical Friday

A classic Friday. The whole day was an “inside day,” meaning a day
on which trading occurred within the boundaries of the previous day’s
trading (to the left of the perforated line). In short, a disappointing,
directionless day. The day starts with a gap down and drops to a low [1],
changes direction, kills all my shorts, and closes the gap [2]. When I finally
convince myself to take some longs, it kills them, too, by moving sideways
the entire day [3].

On Fridays I tend to close, or at least greatly reduce the quantity of open
swing trades I am holding. If you are thinking of sleeping on some stocks
over the weekend, be aware that you are taking a risk, since you can never
know if some crisis will erupt during those two long weekend days. This
is even more applicable if you’re taking a day off, making this a longer
weekend. The more time you hold those stocks, the more risk you take. I
tend to keep stocks over the weekend only if I have taken a partial of three-
quarters the original quantity bought for a handsome profit.

Options Expiration Days

These are very significant days. Every third Friday of the month, on the
Chicago Stock Exchange, stock options expire. This book does not describe
trading options, which is an entire profession in itself, but we do need to