"The most important decision you make is to be in a good mood."
Weak opens that allow for dip buying have been great opportunities, but they are working so well that the buyers are not waiting this morning. We had a solid open as overseas markets shake off all negatives.
Since it is a holiday week the news flow is slower and there isn't too much impacting the action in the early going. Most of the bears figure they shouldn't bother fighting the positive seasonality that tends to occur around Thanksgiving.
QuantifiableEdges.com has several interesting studies about the action that occurs this week. Historically the best action occurs on Wednesday and Friday. From 1960 through 1986, if you had bought the close on Tuesday and sold the close on Friday you would have had a profit every year except once.
Since 1987 the trade has not worked as well, but there is a key factor that influences the results. That factor is whether the indices close strong or weak on Tuesday. If they close weak, the chances for positive action on Wednesday and Friday are much higher. When market players are too positive on Tuesday they tend to drain the rest of the week of its positive inclinations.
Keep in mind that seasonality is an inclination and not a certainty. The market often does not follow the script, but it does give us some sense of how sentiment tends to develop.
As I discussed yesterday, most aggressive traders are more focused on strong action in small-cap stocks rather than movement in the indices. It is the pockets of action in some of the speculative small-caps that offers the best opportunities.
Yesterday I mentioned several names, among them Riot Blockchain Inc. (RIOT) - Get Report , Helios and Matheson Analytics Inc. (HMNY) and U.S. Global Investors Inc. (GROW) - Get Report , that saw some speculative action. I'll be focused again on these type plays.
These small-cap movers will not be covered in the traditional business media outlets, which remain focused on stocks such as General Electric Co. (GE) - Get Report and Time Warner Inc. (TWX) that may be newsworthy but offer little in the way of short-term trading opportunities.
This is holiday trading now and that means focusing on some smaller stocks that are enjoying a speculative surge. You must be vigilant and quick, but it can provide a nice holiday feast if you find the right stocks.
I'll post some names that are on my radar in Columnist Conversation a little later.
(This article originally appeared at 8:10 a.m. ET on Real Money, our premium site for active traders. Click here to get great columns like this from James "Rev Shark" DePorre, Jim Cramer and other writers even earlier in the trading day.)
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At the time of publication, Rev Shark was long RIOT, HNMY and GROW.