Buy the Close, Sell the Open
Updated
In a recent report by Bespoke Investment Group, it was revealed that one of the most profitable trades on Wall Street, since 1993, was to simply buy the S&P close, and sell the open. If you did just that alone, you would have seen a whopping 800% return to date, vs. doing the opposite, which resulted in a shocking 10% loss over the same period. According to Zero Hedge, this simple but effective strategy has seen the S&P rise 660 points since May, while doing the opposite has shown essentially no change. On the year, the buy the close, sell the open strategy is up 9.2%, vs the buy the open, sell the close, which is up just 2.6%.
I think it goes whithout saying that markets are being manipulated from every angle imaginable, and it's clearly nothing new. We've all observed the seemingly relentless gap up's, like the one we're seeing again this morning, persistently distorting valuations, and acting as a money printer of sorts. It's frustrating when these types of schemes appear, because you know it's no accident, and market participants are willfully tarnishing the integrity of markets, and along with it, the mechanism of price discovery. Personally, I'm sleeping great now that I have zero long exposure. Alternatively, with little if any upside left in markets, based on my own technical and fundamental analysis, I'm positioned for a repeat of the March crash. I think the megaphone will hold on the monthly, and we'll see a 10% correction in Dec/Jan, at the very least.
I appreciate your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
I think it goes whithout saying that markets are being manipulated from every angle imaginable, and it's clearly nothing new. We've all observed the seemingly relentless gap up's, like the one we're seeing again this morning, persistently distorting valuations, and acting as a money printer of sorts. It's frustrating when these types of schemes appear, because you know it's no accident, and market participants are willfully tarnishing the integrity of markets, and along with it, the mechanism of price discovery. Personally, I'm sleeping great now that I have zero long exposure. Alternatively, with little if any upside left in markets, based on my own technical and fundamental analysis, I'm positioned for a repeat of the March crash. I think the megaphone will hold on the monthly, and we'll see a 10% correction in Dec/Jan, at the very least.
I appreciate your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
Note
Vix is looking ripe for a breakout. We're getting some pressure here around the 24-25 level. But, I think if we break above $25, we're going to explode higher: Note
Put/Call ratio showed irrational exuberance on the open, once again, with a .33 handle. But, sentiment is slowly shifting negative an hour into trade, just as we saw yesterday: Note
Bulls fighting to hold on to the 50 period MA on the 15 minute (366.55): Note
Support is holding up well (so far). The bulls are finding solid demand at fairly elevated levels. This is a bullish sign, but overall the week's price action has been bearish. Let's see if the bulls use this momentum to take us back to the top of the intraday range: Note
I don't know how journalists in the financial media continue to write articles everyday with titles like, "US Stocks Rise on Stimulus Hopes," or, "US Stocks Rise as investors Track Stimulus Talks," or, "Stocks rise, recovering some losses as investors eye stimulus, vaccines," and still get up the next day to go to work. How many times can you explain price action with these same elementary narratives? Is anyone seriously buying this sh*t? Talk about the FED, and what dollar debasement is doing to our purchasing power, and where the money is really going. Notice your food doubling in price lately? How about that condo? Or the 401K? Inflation is here big time, and it's not even being discussed in the MSM. They're too busy cheering on the FED as they print more money, making hard working American's poorer, and poorer, and poorer. Soon we'll all be billionaire's, but a Big Mac will be $900 Million...
Note
SPY getting some resistance at the top of the range: Note
It's been an orderly walk-up since about 11AM. Bulls just broke through the top of the range, let's see if we get a short squeeze, or a sharp reversal: Note
Bulls appear to be going for the top of the channel around 368.50: Note
Short squeeze coming right up. Let's see if the bulls have the audacity to go for Monday's high around 369.79 (green resistance line): Note
Very interesting price action today. Yesterday, sentiment was quite negative, and stocks sold off from around 10AM onward, and into the close. One day later, the market does a 180, and we're now seeing a buying frenzy/short squeeze, taking us back near all-time high's. WTF? Note
Stock buy-backs might be the culprit...Note
Well defined descending channel here on the 15 minute. Let's see if it can contain the irrational exuberance by bulls: Note
Dancing on top of the channel. Let's see how power hour treats the bears as the bulls seemingly prepare for a short squeeze into the close: Note
That's all folks! It was a fairly quiet day of trade, but the bulls sent a clear message to the bears, that they're not done yet. Yesterday's negative sentiment was smacked 180 degrees today, and SPY ended the day near all-time high's. Vix wasn't able to hang on to a 23 handle, but we're still looking resilient as there's plenty of risk that need's protecting right now. Tomorrow's another day, I hope you guys have a great night. Cheers! Michael.
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