It's the time of year when fund managers pack their speedos, sun cream and take time off. They sure do need it, poor things.
But as investors take it easy, traders will be scootching closer to their screens. That's because now is the time market volatility ticks up. Fewer big players in the market means less cash chasing shares.
(Photo credit: Andrew Henderson / The National)
Which means it takes less money than usual to make them move.
Trading, unlike investing, is concerned not with a share's potential for capital growth. It's all about profit from price movement. These short-term speculators will have their technical levels worked out and try buy and sell based on where a counter is relative to the magic
numbers.
Yes, I know, the word "speculator" has become synonymous with something you might find on the bottom of your shoe. They will, however, keep the market alive: in one of the weird ironies that make the markets, speculative activity makes it difficult for any one speculator to do anything too damaging.
All of this means that we are unlikely to see much drama on the Dow, FTSE and the majority of emerging markets until at least January.
