Holiday trading is usually a poor time to trade. Activity is typically very low, especially during the last few holiday trading days leading up to New Years. Were you trading over the holiday, or did you think that there wouldn’t be much holiday trading activity, so it wasn’t worth the effort?
Holiday Trading: A Changing Holiday Week?
Typically, the holiday trading week between Christmas and New Years has low volatility and not much interesting trading. But, the past few years have been a bit different. We’ve seen some decent trading. I don’t know if this is a change in the markets that will endure or not. With more people in the markets and from different cultures and religions, the typical low volatility holiday trading week may be receding into history. It’s something to notice and be aware of.
Holiday Trading: Last Two Days of the Year
Here are the last two days of holiday trading for 2015. You can see that on December 30th, the market had a couple of good trades and a reasonably tradable range. On December 31, New Year’s Eve, some excellent trading occurred, if you were patient.
While the volume was lower than on typical, non-holiday trading days, it wasn’t so low it couldn’t be traded. The holiday trading on New Year’s Eve, for example, was a little over one million contracts. A typical trading day is often double that, but one million contracts demonstrates some liquidity. As a contrast, recent heavy volume days in Crude Oil, for example, have been around 750,000 contracts, with average trading days in Crude closer to 400,000 contracts traded.
Holiday Trading: The Future
It is too soon to tell if this holiday trading pattern will continue and we will see more trading activity during this period in the years ahead, or this is just an aberration and we’ll be back to holiday trading as usual. But, if you spend the holiday week near your trading desk and can’t wait for the New Year to begin trading again, check out the S&P futures. You might find the holiday trading better than you thought.
And, now that holiday trading is over, it’s time to get back to trading. We’ll be holding a free webinar on the Wyckoff Method on January 16. I’ll go over recent trading and some of the things we look for in making and managing trades. You can learn more and register at this link:
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