c10 JWBT016-Busby October 9, 2008 11:3 Printer: TBD
Money Never Sleeps 119Market Generalizations for ConsiderationJanuary 1 Traders begin the year with enthusiasm and generally
try to push prices higher.
April 15 Tax Day ushers in gloom and doom. A trend may be
reversed.
Memorial Day Beginning of summer, and volume falls as
temperatures rise.
July 4th Enthusiasm returns as traders anticipate the holiday.
However, the excitement will likely be short-lived as
volume soon evaporates.
Labor Day Official end of summer, and volume returns.
Thanksgiving Enthusiasm again returns, and the markets tend to
rally through the Christmas season.
Christmas A happy time when markets often rally.Jeff Hirsch, the author of theStock Trader’s Almanac(published by
John Wiley & Sons) gives specifics that allow the new trader as well as the
old trader to increase his odds of success by knowing the details of history
and explaining the connections of time and price. For information about
how the calendar affects trading, go to http://www.stocktradersalmanac.com.
Perhaps theAlmanaccan also be a useful tool for you.
Figure 10.2 depicts the frequent reaction to trading in early mid-April.
Tax Day tends to be important to traders and to the markets.PEARL 18
The market usually reverses its trend after July 4th.After Hours—A New Frontier
Few careers offer as much flexibility as trading. With a computer and In-
ternet access, trading is a mobile vocation. In fact, you can board a vir-
tual train and travel around the world electronically to trade foreign mar-
kets without stepping a foot out of your home on Main Street. Or you
can spend your days golfing while using your nights for trading. Today’s
trader can even trade on many holidays. The opportunities are endless be-
cause revolutions in technology and communications have expanded the
universe.
After-hours trading is valuable for several reasons. First, electronic
markets increase the hours and the products that you can trade. In