End of the Day Selling Has Picked Up
Here's something that I've been noticing lately: After 3 o'clock rolls around over here on the east coast, US Stocks have been losing steam into the close. Sometimes we see a market rally throughout the day that fizzles into the close. And other times, an already weak session finishes up even worse. I've picked up on this new trend but hadn't seen it plotted on a chart like this until this weekend.
The good folks over at Bespoke Investment Group absolutely nailed it with this one. Well done. The chart represents the rolling 30-day average of the last hour's performance for the S&P500. Look what's been happening most recently:
"A positive last hour of the trading day for the market is a sign that traders are comfortable holding stocks overnight and into the next day, while a negative last hour means they aren't. Last-hour performance is also a good gauge of how traders feel about foreign markets and geo-politics in general since Asian and European markets open for trading while we're all sleeping here in the U.S....
....Over the last month (22 trading days), the market has declined in the last hour of trading 18 times (82%) for an average change of -0.14%. More recently, the index has now declined in the last hour 8 of the last 9 trading days, and even this week when the market rose, it sold off in the final hour 3 out of 4 times! Traders are just doing whatever they can to get stocks off their hands by the time the 4 o'clock close rolls around"
I thought this was really interesting. I had noticed this new theme developing, but this chart is right on the money and tells the story well.
Source:
Last Hour Selloffs Becoming The Norm (Bespoke)
Tags: $SPY $SPX $ES_F