Always watch the opening and closing of the major market indices. The behavior in the first and last 30 mins of trade tells one a lot about the mood of the market. In general, in the absence of any obvious and “material” news/data releases, emotional trading generally is evidenced in the first 30 mins of trade and the unemotional (or smart) money occurs during the last 30 mins of trade. Although easier said than done……..follow the smart money (don’t confuse smart money with smart people as the two often don’t go hand in hand). Bullish conditions are suggested if market closes well off its low of the day in the last 30 mins of trade, even if the market closes down for the day. This behavior occurred yesterday in the US with the Dow putting on 75pts and the Nasdaq 15pts in the last 30 mins of trade (actually the Nasdaq closed more or less on its high of the day).
This intra-day behavior in the market is certainly not consistent with a market where the bull’s grip is deteriorating! Until we get evidence to the contrary, we continue to position ourselves for continued upside in equity markets.
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