I genuinely want to know why there's a strategy like this to buy a boat-load of stocks (about 5M) at the closing bell today. It was a blood bath all day. Is this just a perception that the market has already reached the bottom? Does someone know what's going to happen on Monday's opening bell? Or is this just what traders do at the end of the week in a major down turn?
Posted by radix33
11 Comments
closing a short
Could be repositioning, shorts taking profit, etc… don’t read too much into it because it could be a bunch of things in one.
On days with selling, funds will just not even bother with the chop and just put orders in to buy the closing print, or just wait til right before the close to put orders in. The close and open have much more participation than the normal day.
You certainly don’t. We certainly don’t. And anyone who does is going to profit off of you not knowing.
EOD order – End of Day order.
The last fifteen minutes of every day (the final one minute, even) is when most of the huge institutional orders go through. If you look at VOLD you’ll see an insane volume spike in the last seconds of the session more days than not.
more red for sure. the monthly candle is so big now, and the march 31 is very near.
spy may go down maybe to 5800???
I think we need to refresh memories on what a market “bloodbath” is. Young investors have no concept on how bad it could get.
Few possible explanations:
1) Institutional rebalancing – funds that need to hit target allocations buy mechanically at end of week regardless of sentiment.
2) Short covering – after a bloodbath day, shorts take profits before the weekend to avoid gap-up risk on Monday.
3) “Smart money” actually buying the fear – same pattern happened in every correction I’ve DCA’d through. Nobody knows Monday’s open, but the big buyers don’t care about one day, they’re positioning for months ahead. The retail panic selling into their bids is kind of the whole game.
baron
There are multiple reasons. Legit ones and insider trades. In general it is nothing unusual right before the closing bell on a Friday. It was indeed a red day and an oversold one too. Also there is a chance, that on Monday the POTUS talks the market up again before the futures open.