Light Weeks Generally Favor Bulls
by Charles B. Carlson, CFA
Dow Theory Forecasts

History says that you buy during light trading periods. Why? Because during slow trading weeks - such as the next two weeks - a lot of the institutional investors stay home, leaving the market to the retail investors.

And since retail investors are usually an optimistic lot, the bulls usually prevail.

To be sure, such historical tendencies don't always hold, and one could argue that this year, retail investors may be even more bearish than institutional investors.

That's what makes the new few weeks' trading so interesting, in my opinion. Indeed, rare is the case when you can isolate a trading group so clearly as you will with retail investors.

How trading goes the next two weeks will certainly shine a spotlight on the prevailing attitudes of individual investors. Should the weeks go badly, it would indicate that individual investors are still not ready to get back into this market. And that would not bode well for a sustained upside move in January.

If, on the other hand, the market turns in good results, that may mean that individuals are starting to fancy stocks again, which would be good news for the market in 2003.

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