Sean’s Rant

There is a new witching hour in the market. Its 12:30 PM. I’ve watched it happen a dozen times now. I hadn’t tagged the exact time though until now. its 12:30 PM EST. Watch it if you don’t believe me. The market lately is no longer full of investors. its full of traders and its like a shark tank. The overall market volume lately is fractional and the majority of trades being done are by day traders.

I don’t blame them. There is not a whole lot of reason to be ‘investing’ right now, due to the uncertainty, short term trading is much less risky, even when using very risky instruments. 

So here’s how to capitalize on this phenomenon. Today, you could have bought SKF (Ultrashort Financials) and when it was up 11% at 12:20 PM EST, if you wanted to make a 10% gain on top of your 11% gain for the day with SKF all you had to do is sell your SKF and buy UYG (Ultra Financials) to play this game. I am not recommending UYG for the long term because financials are doomed. The safer play for a 10% gain is just to wait until SKF gets to 11% at 11:20 and just buy UYG. Its a weird bet because I totally disagree with  buying UYG in general but you have to look at the fundamentals of what happens when someone takes off their double short (cashes in their gains). 

This has the effect of buying two shares for every sold double short. And if someone turns around and buys UYG like I am recommending in this scenario, then they have effectively just bought 4 shares. Imagine the reversal effect this can have on the shares! 

I would have capitalized on this if I had some readily available capital, but thanks to the 3-day rule for stock trading I am waiting until tomorrow. It was nice to see my hypothesis come to fruition after I had concluded that this was the case, and a confirmation of the time also.

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