OVERNIGHT BUYING OR SELLING ORDERS As a rule, out-of-town buying orders accumulate over night. If the buying orders are in excess of the selling, stocks will advance for the first thirty minutes, while the public's buying orders are being filled. Then a reaction will take place. Prices may go lower than they were at the opening; drift along in an uncertain way until about 2 :30 P.M. when the professional crowd on the floor decide to even up; then either advance or decline for thirty minutes, according to whether the floor traders are long or short. Remember that the professional floor traders have no commission to pay. You can buy a stock that goes up 1/2 point; then sell out and you are just about even, after paying taxes and commission, while the scalper on the floor makes 1/2 point, because he saves the commission. The newspapers on Sundays usually carry a review of the market for the past week and the public, after reading all of the news, send in their buying and selling orders for Monday morning. If the orders are very heavy, they will influence the market for thirty minutes and sometimes one hour. After this, the trend of the market will be the opposite. A market that has been strong during the week or es pecially during the latter part of the week and closes strong on Saturday, is likely to open strong Monday and finish the advance in the first hour on Monday. Therefore, be very careful about buying stocks on Monday morning's strong opening. Public buying orders which accumulate over Sunday are all executed Monday morning and as soon as this demand is supplied professionals start selling and the market has a reaction in proportion to its condition and position at the time. Even if it is a bull market and going higher you will be able to buy cheaper on Monday afternoon or Tuesday when the professionals are hammering prices down after the public buying wave has been satisfied. Rich Dad Poor Dad Robert Kiyosaki Rich Dad, Poor Dad The above rule is reversed in a declining market. If stocks have been weak all the week or during the last two or three days of the week, and close at the low on Saturday, forced selling by the public will come in Monday morning and cause lower prices during the first 30 minutes to one hour. After this pressure is off, the market will rally. Therefore, it pays to sell on a strong rally Monday or to buy on a weak market on Monday morning. This rule of course applies to normal markets. online stock trading ~ stock invest |