Market Timing – The Thursday/Monday Syndrome

Before getting to my monthly posts on ETF technical analysis, I saw something over the weekend that gave me pause; something called “The Thursday/Monday Syndrome”.

From John Mauldin’s weekly newsletter:

“The classic Thursday/Monday syndrome starts with the kind of action we saw yesterday [Thursday]. The markets open under pressure and selling accelerates in swelling volume. By early afternoon, there is a virtual stampede of selling. Then, later in the session, stocks stabilize a bit based on some reassurance. The action on Friday is uneven, often ending choppily steady or somewhat weaker. Then on Monday, the trapdoor opens with liquidation and margin calls bringing tsunamis of selling.”

The paragraph went on to say that the carnage could carry over into the following Tuesday before any kind of relief is seen.

I have not idea if this is going to happen tomorrow. But if it does, I could see a trading opportunity for covered calls. Bid/Ask spreads can provide many opportunities, especially when liquidity is an issue.

So I will have my eyes on the markets Monday and possibly Tuesday to see if there are any bargains in October covered calls. Otherwise, September may be the first month this year when I don’t see any income from covered calls.


Sources:
Catastrophic Success
John Mauldin | September 24, 2011
http://www.ritholtz.com/blog/2011/09/catastrophic-success/

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About T. Knight
Blogging about my journey to financial independence via investing for cashflow.

3 Responses to Market Timing – The Thursday/Monday Syndrome

  1. Pingback: September Technical Analysis – DRN « Investing for Cashflow

  2. Pingback: September Technical Analysis – EDC « Investing for Cashflow

  3. Pingback: Market Timing – The Thursday/Monday Syndrome Revisted « Investing for Cashflow

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