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• Teata ebasobivast posititusest

  23.12.2005 16:03

  AloV

  Rev Shark:

  Holiday Shorting Might Just Yield Lump of Coal
  12/23/2005 8:49 AM EST

  "When the cat's away, the mice will play."

  -- Spanish Proverb

  The Friday before the Christmas holiday is certain to see a slowdown in trading as market participants wrap up their shopping, begin holiday travels, and enjoy gatherings with friends, family and co-workers. The big funds and institutions have skeleton crews at work just to make sure nothing terrible happens to the positions they are holding but they have already made their trades and positioned themselves for next year.

  Next week the slow action will continue. On average, volume declines by about 35% to 40% between Christmas and the New Year's holiday.

  So the big boys are away, and that means the bulls can play. A thinly traded holiday market tends to favor the bulls. The folks who are left are generally of the bullish persuasion and their inclination is to push stocks up rather than down. In a thin market at the end of the year there is a very strong inclination to try to gun some of your big holdings to boost performance. Throw in the fact that no one wants to sell and trigger taxes in the last few days of the year and you have the potential for some of the year's strongest stocks to finish with a bang.

  Another thing to keep in mind is that this is the holidays and people tend to be in a positive and upbeat mood. Bearishness doesn't play as well when we are in a celebratory spirit. Maybe that is a denial of reality that will hit us in the face come January, but for now being a scrooge or a grinch is unlikely to be the way to enjoy the season.

  It is going to be choppy in the thin trading, but shorting stocks when folks are drinking eggnog, hanging mistletoe and having a good time is likely to be quite dangerous.

  We have a slightly positive start to the day. Durable goods were up big thanks to aircraft orders but if that is taken out the number is a little soft. That isn't all bad because it is anti-inflationary, but it's certainly not a big positive either.

  Overseas markets are generally positive, oil flat and gold up.