There are three notable New Year's Eve trading sessions that I can recall. In one year, I had a very large position in a stock named Omnipoint (50,000 shares) which I gradually sold off over the course of the day to take a capital loss to offset some other gains I had. It was one of the stupidest things I ever did, but that's a story for another time. On another New Year's session, AOL was trading around 142 at 3:55PM. It was to be added to the S&P 500 at the close of business. I placed an order to short the stock at 147. I got filled...on the short side...at 160! The third notable session was December 31, 1999. It was a half-day trading session ahead of the Y2K debacle that never materialized (thankfully). All three parables are important to note when wondering aloud as I did as to why in the world the NYSE is open at all today (with a full day due on Monday as well meaning we traders don't get a day off for the holiday this go-round). It turns out the answer is in Rule 51 of the NYSE by-laws:
“The Board has determined that the Exchange will not be open for business on New Year's Day, Martin Luther King, Jr. Day, Washington's Birthday, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Martin Luther King, Jr. Day, Washington's Birthday and Memorial Day will be celebrated on the third Monday in January, the third Monday in February and the last Monday in May, respectively. The Exchange Board has also determined that, when any holiday observed by the Exchange falls on a Saturday, the Exchange will not be open for business on the preceding Friday and when any holiday observed by the Exchange falls on a Sunday, the Exchange will not be open for business on the succeeding Monday, unless unusual business conditions exist, such as the ending of a monthly or the yearly accounting period.”
As it turns out, today is the end of an accounting period. Well, many traders and institutions apparently need the extra time to smooth out positions. Whether that logic is true, it is the position of the exchanges. It clearly is worth showing up- particularly on a Friday when few people are around as moves in things like the Omnipoints and AOL's of yesteryear can become quite exaggerated. Also, the exchanges stay open for the full day for those accounting reasons cited in the rules, i.e. giving everyone as much time as possible to do whatever it is they need to do. So while it'd have been nice to have a full (or at least a half-day off), definitely view today as the opportunity it has so often been in the past...and have fun tonight!
Markets overnight were quiet in Asia with Tokyo closed and Hong Kong up 0.2%. In Europe, prices are generally lower with London and Paris both off about 0.75% but Frankfurt closed. The dollar is notably weaker with it approaching six week lows against the yen and down a full euro. Gold is up $7/ounce. State-side, it remains startlingly quiet with futures down a touch. There’s no economic data today nor any major news/earnings. It’ll likely remain fairly quiet today but there’s always the possibility of a late afternoon move with conditions so illiquid. The bias should remain flat to slightly weaker due to the downdraft in Europe. The focus will mainly be on the microcaps once again but as the afternoon progresses, certainly keep an eye on any relative strength/weakness plays into the end of the year should there be any market movement whatsoever.
Reiterating-
If the whole story is not there -
If something is good, assume either a short thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified.
If something is bad, assume either a buy thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified-
Good- The following stocks have good news and/or a strong technical pattern
DARA- closed on a high
MCP, REE- closed near a high
MBI- closed near a high after JPM and Barclays withdrew from a lawsuit over MBI’s decision to split its insurance unit in two
PUDA- closed near a high after it completed acquisition of four coal mines under phase II of the Pinglu Project
VHC- closed near a high
IMMR- closed near a high
IMAX- “Daily Mail” reports SNE may bid north of 40 for IMAX
Bad-The following stocks have bad news and/or a weak technical pattern
CHGS- near island reversal in closing near a low
SHZ- reversed in closing near a low
Earnings:
None today
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
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