Is Halloween Night Scary For Traders?

Halloween is known for being the scariest night of the year. So I wondered whether that was true for stock traders. The study below looks at buying the close on the last trading day of the October and selling at the open in November. Most years this meant buying on Halloween. Sometimes, when a weekend was involved, the purchase was done a day or two early, but the position still had to be held through the scariest of nights. What I found was that Halloween has only really been scary when the market was locked in a long-term downtrend. Below is the Halloween night trade broken out by whether SPY was trading above or below its 200-day moving average.

First, the downtrends.

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Not many instances – but a little scary (especially 2011).

Now, Halloween in uptrends, like we have currently.

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Most Halloween nights during uptrends it was better to dress as a bull.

Good luck if you trade tonight, and rest easy!

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

 

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Overnight Overview 10/31/14

Thursday was another strong day for the market, but it did not lead to very strong edges for the overnight. Below is a look at the Odds Sheet as it stood near the close.

2014-10-31 image1

Two of the eight securities we track were meeting some kind of min criteria. DIA was suggesting a short-side edge, while NQ was suggesting a long-side edge. ES is what I trade, and that was not suggesting much of anything. Its Price Action Odds were mildly bullish, as was Internals. But Seasonality was mildly bearish. The EdgeFinder offered no further insight on Thursday. So there simply was not a lot of evidence with which to base a trade. Therefore I sat out.

There were some NQ traders in the Trade Discussion Room that took NQ long overnight. And they were rewarded handsomely when the BOJ announced more easing. At the open this morning ES gapped up 24.00 points and NQ gapped up a whopping 70.75 points.

Tonight is Halloween. And I will have some research later on today that will let you know if that should scare you.

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

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Overview Catch-Up 10/27 – 10/30

Thursday was another strong day for the market, but it did not lead to very strong edges for the overnight. Below is a look at the Odds Sheet as it stood near the close.

2014-10-27 image1

All-white. Basically breakeven. There was no trade here. Monday opened with an 8.25 point gap down, so it was a good night to avoid a long.
Monday afternoon saw the following Odds.

2014-10-28 image1

NQ barely met the min, but it was alone. ES was not close. No trade for me. ES opened Tuesday with a 5.50 point gap up for ES.
I whiffed on capturing Tuesday night’s Odds Sheet. NQ again met the min long, but ES was not there. And a special report I sent out to subscribers also indicated Tuesday’s action left the edges pretty dull. The night was pretty dull also. ES gapped down 0.25 points to open the day on Wednesday.

Wednesday was another easy decision.

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ES Odds just weren’t there. NQ was. But there was a bearish study that appeared in the EdgeFinder. So there was no compelling story for me to base a trade on. The night was back and forth. ES opened this morning with a 2.25 point gap down.

I am back in the office now. The Trade Discussion Room will be open today and tomorrow. And perhaps we will see some stronger overnight Odds and I’ll get some trade activity.

Good luck if you trade tonight, and rest easy!

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

Get Overnight Overviews and other blog posts delivered via email - join the Overnight Edges mail list.

Overnight Overview 10/24/14

Thursday was another strong day for the market, but it did not lead to very strong edges for the overnight. Below is a look at the Odds Sheet as it stood near the close.

2014-10-24 image1

QQQ was the only index security we track that had its Averages column highlighted. It showed up in orange, meaning it was meeting the minimum criteria for a possible short trade. Everything else was white, suggesting nothing more than very moderate edges. Additionally, the EdgeFinder was blank. Based on my research, there simply wasn’t much on which to base a trade. So, as I do in such situations, I sat out.

Despite the moderate readings, it was a pretty wild night for the markets. ES traded down more than 14 points after Ebola news came out on Thursday night. But it clawed all the way back and opened Friday morning with a gap up of 0.50 points.

Good luck if you trade tonight, and rest easy!

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

Get Overnight Overviews and other blog posts delivered via email - join the Overnight Edges mail list.

Overnight Overview 10/23/14

After running up the previous few days, the market pulled back a bit on Wednesday. This made for some interesting decisions for overnight traders. Below is a look at the Odds Sheet as it stood near the close.

2014-10-23 image1

SPY, QQQ, and NQ all finished with their Averages highlighted in green. This meant that they met the minimum criteria for a possible long trade. ES is what I trade, and it JUST MISSED. An Average Profit Factor of > 1.30 is required and it came in at 1.27. But it also missed by 1 point and less than 30 seconds. Price was moving fairly quickly in the 15 minutes between the 4pm NYSE close and the 4:15pm futures close. If ES closed at 1924.75 or lower its Price Action Odds would have come in higher, and it’s Averages would have met the minimum long criteria. I noted this in the trade discussion room and on the notes page. The EdgeFinder came up blank, so there was no confirming evidence there to push me over the edge. We looked at a number of different things in the Trade Discussion Room, but did not identify anything suggesting a strong edge in either direction. I determined that if ES closed less than or equal to 1924.75 then I would look to go long overnight. It was trading there with less than 30 seconds to go, but a late surge took it above my range. Since my minimum criteria was not met, I sat out. There were some NQ traders in the room that elected to take a long trade in NQ overnight.

As it turned out, it was unfortunate that my entry was missed. ES put in a strong move overnight and opened this morning with a gap up of 15.50 points. NQ traders would have really made out well as NQ gapped up 31.75 points this morning. Near misses like this can be frustrating and disappointing to miss out on. But near misses happen in both directions. Sometimes they work out, and sometimes they don’t. For me, it is simply a matter of making sure I take trades when the edges are strong, and avoid trades when edges are dull.

Good luck if you trade tonight, and rest easy!

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

Get Overnight Overviews and other blog posts delivered via email - join the Overnight Edges mail list.

Overnight Overview 10/22 & A Very Small Winner For Me

Tuesday saw nice gains for the market, as it continued to bounce strongly off the lows made last week. But the overnight outlook did not appear bullish. Below is a look at the Odds Sheet as it stood near the close.

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Quite a bit of orange appeared in the Averages column. Orange highlight means that security is meeting the minimum criteria for a possible short trade. ES is what I trade, and it was one of the securities suggesting a short side edge. A look at the EdgeFinder showed just one study triggering. It supported the idea of a likely selloff overnight. I did not see any evidence that contradicted what the Odds Sheet was saying. And closer examination of the Odds Sheet showed that even those index securities that did not meet the minimum criteria still favored the short side. Therefore, I decided to short ES as it approached the close.

My fill was not great as I entered a few seconds early. I ended up getting short at 1937.75. The last trade was a half point above there and the settlement price was 1938.00. The night again saw a lot of back and forth action. This can be seen in the chart below.

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For most of the night my position was profitable, but there were some spikes higher that put it under water. The last spike came around 30 min. before the 9:30 AM EST NYSE open. With about 6 1/2 min. to go until the open I got sick of the roller coaster and decided to exit with a one tick profit at 1937.50. My fill there was pretty good. ES opened a few minutes later at 1938.25. That was breakeven with the final trade near 4:15 PM on Monday, but was above the settlement price by 0.25 points. Traders that took this trade last night probably did not make or lose much money regardless of exactly where there fills were.

Good luck if you trade tonight, and rest easy!

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

Get Overnight Overviews and other blog posts delivered via email - join the Overnight Edges mail list.

Overnight Overview & Why I Passed On This Potential Short Trade

Monday saw some strong upside follow through after Friday’s rally. And as we reached the close the strong action showed some signs that the night could be weak. Below is a look at the Odds Sheet as it stood at the close.

2014-10-21 image1

As you can see, most of the Odds Sheet was white, but ES met the min criteria for a short trade. It was alone though. There were no other index securities meeting the min short criteria, and there were no EdgeFinder studies suggesting a short-side edge. Additionally, there was nothing we explored in the Trade Discussion Room that showed a consistent edge either. So with the setup seemingly borderline and the market especially volatile, I elected to stand aside.

The night turned out to be a wild one. Futures traders that used the Overnight Edges target amount could have made out well. The 12.23 point target was reached as ES declined as much as 14.50 points during the night. But it bottomed out in the middle of the night and staged a strong rally. In the end it gapped up 10.75 points. This would have hurt traders not using a target or perhaps trading an ETF.

Good luck if you trade tonight, and rest easy!

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

Get Overnight Overviews and other blog posts delivered via email - join the Overnight Edges mail list.

Overnight Overview 10/20/14

Friday saw the SPX put in its first strong up day in a while, but the indices were mixed with the Russell actually losing ground. As we approached the close, overnight evidence did appear consistent or compelling. Below is a look at the Odds Sheet as it stood near the 4:15pm futures close.

2014-10-20 image1

SPY showed some strong upside inclinations, but it was all alone. ES Odds leaned bullish, but not enough to meet the Overnight Edges standard min criteria for a long trade. The EdgeFinder showed mixed evidence, with both bullish and bearish studies appearing. In other words, no consistent message. Therefore, as I do under such circumstances, I sat out.

The overnight was a volatile one. After trading up over 11 points during the night, ES tumbled during Europe’s trading and ended up gapping down 5.75 points Monday morning. NQ also gapped down, but just 2.25 points.

Good luck if you trade tonight, and rest easy!

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

Get Overnight Overviews and other blog posts delivered via email - join the Overnight Edges mail list.

Overnight Overview & How The Odds Helped Me Realize My Largest Overnight Win In Years

Thursday saw the market basically breakeven. So people that don’t monitor the market during the day probably thought not much happened. In fact, it was another very volatile day which started with a gap down of 22 points for ES and ended with a small gain. When it was done, the Odds Sheet looked like this.

2014-10-17 image1

Four of the six index securities we track met the minimum criteria for a possible long trade, and saw their Averages highlighted in green. This included ES, which I trade, its counterpart SPY, and two other futures contracts. Meeting the minimum long criteria meant that I was open to considering a possible overnight trade. The EdgeFinder did not provide any conflicting evidence, but it showed up blank and failed to provide confirming evidence. Seasonality look very good, and I sent a special report to subscribers that broke down those seasonal numbers a bit further. The report supported the numbers shown on the Odds Sheet. So with ES green, no conflicting evidence, and some other index securities also showing bullish odds, I elected to take a long position overnight. When Seasonality is strong, I typically use the X Target. Volatility has been sizable so both the stops and targets shown on the odds sheet were much larger than usual. Therefore, I determined I would use the standard stop, calculated at 28 points, and the X Target of 32 points.

The night was a terrific one for overnight traders, and though my 32 point target wasn’t quite reached, ES did managed to gap up 27.75 points overnight. I made just shy of that, with a 27.50 point gain. NQ traders would have done extremely well also, as that gapped up 62 points Friday morning. The 27.50 point gain was the largest overnight win I have had since opening Overnight Edges a couple of years ago. Recent volatility has been a bit scary. But with trading it is important to have the fortitude to take trades when strong edges reveal themselves as they did Thursday afternoon, even if the market does appear somewhat scary. All trades obviously don’t all pay off like this, but it is nice when they do.

Good luck if you trade tonight, and rest easy.

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

Get Overnight Overviews and other blog posts delivered via email - join the Overnight Edges mail list.

Overnight Overview 10/16/14

Wednesday saw strong losses for the market and continued volatility. It also offered mixed and some unusual Odds. Below is a look at the Odds Sheet as it stood near the close.

2014-10-16 image1

The Odds Sheet provided some interesting readings, with two of the eight index securities we track having their Price Action Odds appear highlighted in yellow. The yellow highlight means that instances used to calculate those Odds were very low. And in the case of DIA, its readings were so unusual that there was nothing to compare it to over the last 10-12 years. The Averages column showed some green, but ES Odds were not strong enough to meet the minimum long criteria. In a volatile environment such as this I have no interest in taking on trades where the minimum criteria is not met. So I sat out.

In this case, sitting out was a very good decision, since ES gapped down 22 points to start the day on Thursday.

Thursday night was even more interesting, and I did take an overnight position. I will discuss that in my next post.

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

Get Overnight Overviews and other blog posts delivered via email - join the Overnight Edges mail list.

Overnight Overview 10/15/14

Day or night, this is a wild environment we are currently in. And Tuesday was another day of wild swings. But the overnight Odds were not so wild. Below is a look at the Odds Sheet as it stood near the close.

2014-10-15 image1

QQQ showed strong Odds, but it was alone. Nothing else met the Overnight Edges standard min criteria for a possible long or short trade. ES is what I trade and its Averages were very close to breakeven. The EdgeFinder showed a small hint of an upside edge. In a volatile environment, I need way more than a small hint to put capital at risk. So it was an obvious decision for me to sit out. With evidence so weak, I don’t know of any traders in the Trade Discussion Room that took a position overnight.

And it was a good night to be sidelined. ES gapped down 29.00 points this morning and NQ gapped down 66.50 points.

Good luck if you trade tonight, and rest easy!

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

Get Overnight Overviews and other blog posts delivered via email - join the Overnight Edges mail list.

Overnight Overview 10/14/14

Selling did not relent on Monday. The major averages all fell again. And the overnight showed some evidence of a bounce. Let’s take a look at yesterday’s Odds Sheet and I’ll discuss my decision.

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Once again it was a split decision among the index securities we track. Four of the 8 met the minimum criteria for a long trade. Unfortunately, ES and SPY were not among them. The EdgeFinder showed some compelling studies but it was not enough for me to override the weak Odds in a high-risk environment. So I sat out again. There were some more aggressive NQ traders in the room that elected to try and take advantage of the strong NQ Odds.

As it turned out it was a good night to be long. ES gapped up 13 points this morning and NQ gapped up 30.25 points.

Good luck if you trade tonight, and rest easy!

 

Overnight Edges was recently named one of the Top Trading Rooms by Dean Handley in Futures Truth Magazine!  Check out the full article here.

New to the Odds Sheets? Check out this video for a detailed explanation.

Get Overnight Overviews and other blog posts delivered via email - join the Overnight Edges mail list.