Lighter Volume Sell Off in the Stock Market Prior to Labor Day Weekend 

Tom Gentile

Posted in
Technical Analysis

By: Tom Gentile
September 2nd, 2022

2 mins read

The financial markets are going to be closed this coming Monday due to it being Labor Day.

This usually sees Investors and traders heading out a bit early on Friday. Also, you may hear of talk that some traders don’t like to hold options positions over the weekend due to the uncertainty of what could happen domestically or abroad that could derail the markets come Monday.

That’s on a normal w-day weekend. Labor Day brings a 3-day weekend with Monday being closed, which gives an extra day for the prospects of something weird happening that could adversely affect the markets.

Option Traders and Investors Taking Their bat and Ball and Going Home

This results in today, Friday, being what’s considered a ;light-volume day.

The markets are always right and even though prices sold off there is a chance that when everyone comes back on Tuesday, and nothing weird happened, they start buying options and / or cost average their securities due to further depressed prices from today.

Figure 1: 5-day Candle Chart on SPY
Figure 1: 5-day Candle Chart on SPY

Bearish Reversal Day

When a security closes at or near its low of the day it may lead to a continuation of that bearishness for the open the next trading day.

It does not guarantee it as any number of things can happened overnight, or in this case over the weekend, which is deemed good for the markets,

Possible Pivot Low on the Chart for SPY

It’s not an ideal pivot low as today’s close was lower than the prior days open.

Today’s price did not take out the low of Thursday, but that is maybe stretching things a bit to consider it a pivot.

The point is the price we deemed possible support at $390 is intact for now.

Figure 2: 100-day Candle Chart on SPY
Figure 2: 100-day Candle Chart on SPY

App: Toms Option Tools

Toms Option Tools scan the markets for bullish and bearish trade opportunities using our proprietary scans and strategy algorithms. TTR Darknet finds bullish entries based on triple stack channel collisions. Money Calendar identifies seasonal patterns with at least 90% accuracy looking back 10 years. Weekly Cash Clock finds short term opportunities that last a week on average. Microcurrency Trader applies Darknet technology and moving averages to cryptocurrencies. Velocity Trader utilizes volume spike and Velocity indicators on custom stock lists. Quantum Scripts scans the markets for momentum acceleration signals and employs Quantum noise filters. Optimal Trader finds directional pre-earnings opportunities that are optimized for entry date, stock movement, and volatility surge. My Trades tracks the profit/loss of your trades, displays stock charts and risk graphs, creates new trades, and edits existing trades. Morning Report provides top 10 option rankings in 6 categories each day.


Disclaimers

Stock and options trading has large potential rewards, but also large potential risk.

You must be aware of the risks and be willing to accept them in order to invest in the stock and options market. Do not trade with money you cannot afford to lose.

This is neither an offer to buy/sell/ or recommend a particular stock or option.

Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been actually executed, the results may have under or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with hindsight.

No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

Disclaimer of Warranties and Liabilities Tom Gentile and TomsTradingRoom, LLC including employees, consultants, and editors (“Publisher”) cannot and do not warrant the completeness or accuracy of the content found in our areas, or its usefulness for any particular purpose.

Tom Gentile and TomsTradingRoom, LLC also make no promises that our content or the service itself will be delivered to you uninterrupted, timely, secure, or error-free. Under no circumstances will Tom Gentile and TomsTradingRoom, LLC be liable for direct, indirect, incidental, or any other type of damages resulting from your use or downloading of any content on our site.

This includes, but is in no way limited to, loss or injury caused in whole or in part by our negligence or by anything beyond our control in creating or delivering any portion of Tom Gentile and TomsTradingRoom, LLC.

You are agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that Tom Gentile and TomsTradingRoom, LLC will not be liable for any I, investment decision made, or action taken by you, or others based upon reliance on news, information, or any other material published by Tom Gentile and TomsTradingRoom, LLC.

Tom Gentile and TomsTradingRoom, LLC relies on various sources of information that we believe to be accurate and reliable. However, we make no claims or representations as to the accuracy, completeness, or truth of any material contained on our site.

Tom Gentile and TomsTradingRoom, LLC are educational portals, providing content for educational and informational purposes only. Neither Tom Gentile nor TomsTradingRoom, LLC are a broker/dealer. Investors need a broker to trade stocks and options and must meet certain requirements. All securities, futures, and investments data and ideas are offered to self-directed investors. All prices in USD unless noted otherwise.

A full disclaimer can be found here:  http://www.tomgentile.com/legal_disclaimers.html.

Sign Up Now for Free Education!