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much of the trading by professionals takes place and where the market movement is best for active traders. Investors should use this period of the trading session to enter and exit positions with a greater degree of probability that market makers do not have as much advantage over them in the way of information. |
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Economic reports that are not announced before the market opens usually come out during this period, as well as company news that may move an individual stock or an entire sector. Stocks tend to settle into a range that sometimes points to their trend for the day, although in a volatile market when news may be announced, the morning session trend may be thrown upside down by what happens in the afternoon session. |
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This occurs at 12 noon EST and 9 A.M. PST and lasts until about 1:15 P.M. EST (10:15 A.M. PST) on a day of good to heavy volume. On a slow day, the closing action may not begin until 2 P.M. EST (11 A.M. PST). Usually, on a typical day, this is the least active stage of trading for the day, where stocks tend to settle into a narrow and uneventful trading range. Day traders tend to take a break at this stage, not wanting to "burn tickets" (rack up commissions) by trying to scalp when the action is relatively light. |
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Investors should use this time to analyze the early session trend and plot possible afternoon positions. This is a good time to step away from the computer, stretch, or do something else so that you are not too caught up in the trading action. Investors should know that this is not the best time to enter the market, as it is best to get a sense of the closing stage action before jumping in. |
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The significant event that occurs at noon (PST) is that the bond market closes for the day. This can create added activity in the stock market in the few minutes leading up to noon, as bond traders begin adding or subtracting liquidity to the market. Investors should be aware of this, and be careful during this few minute period. |
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The other significant activity that takes place during the mid-day period is that institutional traders are given a mid-day report by their research teams that influences the trading action beginning at 1 to 1:15 P.M. EST (10 to 10:15 A.M. PST). Certain stocks are touted by the analysts, and this leads to renewed trading in these stocks by the institutional traders that may result in sharp spikes up in these particular securities. Sometimes the action at this time is ignited by programmed |
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