Its Friday!
July 21st 2006 14:48
I remembered once a lecturer in Empirical Studies in Equity Markets talked about the Monday Effect that affect almost every stock market in the world. The Monday Effect is akin to Monday Blues or Black Monday or anything negative related to just being a monday and as you can guess, yes, its negative for the stock market (usually, as past evidence shows).
The rationale of the Monday Effect flows from that the stock markets usually perform better on Friday, "engineered by the pros", so that brokers, professional investors and speculators can have a good time at the bar after 5pm. With the stock prices inflated beyond thier fundamental value, abitrageurs would usually sell the stocks to make a profit. Sounds neat.
Neat wasn't the word for Friday 21 July 2006 with the US and local bourse having shed some points. It has been a volatile week with only Thursday being the nice day. Many thanks to the Mid East conflict, oil prices and looming local inflation data.
So would we see a Monday Effect on Monday 24 July 2006? My two cents; probably not and maybe a small upward reversion from bargain hunting and better than expected earnings annoucements by firms. (around 20%).
Meanwhile, on the case of the mining company, Cudeco, which is currently embroiled in contraversy over its overestimated copper mine in Rocklands, Queesland, actually had a rebounce slightly on the market after its downgraded estimation were revised for the better. The market is simply lethal in valuing firms.
Till then, have a good weekend mates.
The rationale of the Monday Effect flows from that the stock markets usually perform better on Friday, "engineered by the pros", so that brokers, professional investors and speculators can have a good time at the bar after 5pm. With the stock prices inflated beyond thier fundamental value, abitrageurs would usually sell the stocks to make a profit. Sounds neat.
Neat wasn't the word for Friday 21 July 2006 with the US and local bourse having shed some points. It has been a volatile week with only Thursday being the nice day. Many thanks to the Mid East conflict, oil prices and looming local inflation data.
So would we see a Monday Effect on Monday 24 July 2006? My two cents; probably not and maybe a small upward reversion from bargain hunting and better than expected earnings annoucements by firms. (around 20%).
Meanwhile, on the case of the mining company, Cudeco, which is currently embroiled in contraversy over its overestimated copper mine in Rocklands, Queesland, actually had a rebounce slightly on the market after its downgraded estimation were revised for the better. The market is simply lethal in valuing firms.
Till then, have a good weekend mates.
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