If you’re up on the day by the final hour of trading, take profits and hit the links. The final 60 minutes of trading have become the worst for stocks over the last two weeks, as jittery traders become afraid to keep their holdings overnight in this volatile environment.
In the early stages of the correction since the April peak, the final hour was actually the best hour as valuation seekers came in to buy. But after the infamous Flash Crash and an accelerating Euro crisis (where most of the news develops overnight), traders are quick to sell in the final minutes.
Since May 21, the S&P 500 has lost 0.2 percent on average from 3 pm to 4 pm ET, according to Bespoke Investment Group, the go-to source for intricate market data. During the first three weeks of the correction, the S&P 500 actually averaged a 0.1 percent gain.
The old Wall Street maxim states that the so-called smart money makes their move in the final hour after everyone else has shown their hand. If this is true, they are clearly not a believer in this market.
- Big Banks to See 'Double Digit Returns' by 2011
- Three Simple Rules for Stocks: Top Strategist
- Why US Investors Should NOT Buy Gold
“In the final hour, risk managers are going to hedge funds and telling them to de-risk and that usually comes in the form of liquidating positions,” according to Jon Najarian, co-founder of OptionMonster.com and TradeMonster.com.
The S&P 500 headed for a lower close today after 3M came out and said that overseas earnings may be hurt by a plunging Euro. This would be the third day in the row stocks have been sold into the closing bell.
For the best market insight, catch 'Fast Money' each night at 5pm ET, and starting Monday, a special extended ‘Halftime Report’ each afternoon at 12:30 ET on CNBC.
Got something to say? Send us an e-mail at firstname.lastname@example.org and your comment might be posted on the Rapid Recap! If you'd prefer to make a comment but not have it published on our website send your message to email@example.com.