There’s nothing like the moments before a four-day break to show Wall Street’s true mood.
The markets are closed on Nov. 22 for Thanksgiving and will re-open on Friday, Nov. 23, for a shortened session. But very few traders will be at work Friday, and trading volume should be very light.
For the vast majority of traders, the last hour of trading on Nov. 21 was their last chance to place a buy or sell order for a long time. And they know that a lot could happen over that extra long weekend.
As I wrote in August during a similar bout of volatility, these last moments of trading can be revealing. If traders are optimistic, they’ll buy stocks because they don’t want to miss out on the benefit of good news that hits over the weekend.
But the opposite appears to have happened on Nov. 21. About an hour before the close, the Dow Jones industrial average was down just 65 points. Then traders started selling in a big way. By the end of trading, the Dow had plunged 211 points.
Clearly, Wall Street is worried about more bad news.