Trader Talk: Window DressingJun 30, 2023
The following is a chat between Rob and one of the many traders helps coach. The chat took place the morning of June 30, 2023 and takes a look at the effect of Window Dressing at the end of the month/quarter as money managers add or remove certain stocks in their portfolio.
Trader, 7:08 AM
Impressive action after a big gap up. Guessing this is the institutions buying the performers of the quarter
Rob, 9:08 AM
I have compared a lot of groupings and pairs and about 80% of this is window dressing
here is two examples...but you can look for a lot more
NFLX vs DIS
WMR vs TGT
you get the point
last day of month of June seasonality for SPY is bullish as well as some nuggets to utilize on the Symbols that perform vs those that don't
That Seasonality performance is from Previous Close to Today's Close
How do you navigate the premium we had at the open? I wouldn't blame a trader for having hesitancy despite the bullish seasonality
it is not easy but if you have your pairings like WMT vs TGT... you would have more confidence
reason: TGT still got pulled up with an up open due to the market gapping
that's a great point, I wasn't thinking of window dressing in the context of pairs, only thinking about it in terms of which sectors would be hot and which would not
baskets long and short can be made up of pairs
its quite simple to go through a group like big box stores and look at the quarterly performance and EXPECT window dressing
again...this goes back to some of our previous discussions
when did you know about the Seasonality for today for MU for example?
Last July :)
as 11 months ago...this calendar was the in place for today
when did you know about TGT sucking vs WMT performing well?
Middle of May
so Trading is about forward vision through research, observations, sentiment, macro and statistical information
so anticipating what the institutions have to do is very important
Break it down like this. Most money in the world in the markets is Managed Money or OPM (other peoples money)
People are responsible to do their best to handle that money. They have bosses and managers to please.
So what would the person feel like, what would they do, what do they want to show on the "books" for the month, quarter, semester, YTD ?
No...we don't have any TGT...we own WMT .... whoop whoop
so you think forward about what people have to do, want to do, will probably do
so in that sense there are spectacular OVERNIGHT Trades...not just Intraday only
Start Trading with Odds
Get access to the Seasonality Almanac Dashboard, as well as 1 basic course, for free!