Free Money Day

I think the first of the month should be called Free Money Day as everybody knows buying today is free money. As I wrote yesterday the contrarian in me wants to fade this move but my practical side tells me to sit it out.

Every year we hear a lot of talk about a Santa Claus rally and yet it still manages to occur. That is the reason I am not fighting this first of the month bid but if there were ever a month where this were to fail it is this one. There has been more chatter about the first of the month than I ever could recall plus the S&P 500 has rallied over 35 points in a relatively straight line.

4 comments:

nicasurfer said...

isn't the Ally shares being sold super bearish for the XLF

Tsachy Mishal said...

The AIG and ally offerings might pressure financial but they are a while off.

Anonymous said...

http://www.youtube.com/watch?v=ea7POA68MbY&feature=related

Anonymous said...

It was in the WSJ:
"Some traders have been adopting a new ritual in recent months—buying early on the first day of the month and selling by the day’s close—taking advantage of a peculiar phenomenon that has seen the Dow Jones Industrial Average rise substantially on the first day of each month. That one-day move often has accounted for much of the Dow’s gains for the entire month."