Friday's Market Is All About Short-Term Trading — And It's Often Entertaining
When big Wall Street players aren't working, some aggressive speculation takes hold. Here's my focus on a day like this.
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The half-day trading session following the Thanksgiving holiday is usually very thin, but there are typically pockets of aggressive speculation. The big Wall Street players aren’t working, and that allows individual investors to run up small stocks without bothersome shorts. This is extremely short-term trading, but it is a holiday tradition and more of a game than anything else.
One group that is already active on Friday morning is Bitcoin-relatated names like MicroStrategy MSTR, which is up 4%.
The Wednesday session before the holiday didn’t go as hoped. Despite a history of positive action, the indexes didn’t deliver this time. The Russell 2000 (IWM) managed a small gain, but none of the senior indices were positive.
The most notable action was more rotation out of the Magnificent Seven MAGS and Nasdaq 100 QQQ and into smaller stocks. The Magnificent Seven lost 0.9% but is rebounding about 0.5% very early on Friday morning.
There will be much talk today about retail sales. I don’t ever recall seeing reporting that Black Friday was not doing well. Retail shopping has shifted dramatically, and Black Friday isn’t a one-day thing like it used to be. I would take any observations about retail sales today with a grain of salt.
The Friday session is all about short-term trading, but investors will start to think more about their position for the final month of the year. The big event before the holidays will be the Fed interest rate decision on December 18. Currently, the odds of a quarter-point cut are at 66%.
There will be some economic news before then and lots of speculation about what the Trump administration will do when it takes office in January, but currently, economic optimism is still quite high, and worries about inflation are contained. While there is nervousness about how tariffs and high-growth policy may drive inflation, it hasn’t gained any traction.
From a trading standpoint, the most important issue in December will be whether the rotation out of the Magnificent Seven will continue. It is a very different market when this group is not acting as leaders, and in many ways, it is a better one for traders who focus on picking stocks with good charts and strong momentum.
My primary focus is to keep accounts close to highs while shopping for new ideas. I don’t want to give back gains, and I want to be very selective with new purchases.
At the time of publication, Rev Shark had no positions in any securities mentioned.
