Hey Guys,
The market took a dive yesterday. It wiped out all the gains from the day before and then some. Right now the S&P 500 is around 4,400.
The timing wasn't great for me since I had options positions that reached their time limits at the end of the day yesterday. That drop dragged down most of my position values. That's three Thursdays in a row where the market went down noticeably after starting the day looking good.
Seeing three in a row like that can make it seem almost like Thursdays are cursed. For some people, there might even be an urge to close options positions on a different day since it may seem like Thursdays always turn red. But this is where it might help to step back and think about it from a statistical perspective.
Having three Thursdays in a row that start well and end poorly is not enough to say there is a true tendency or pattern. It's not statistically significant. Imagine if you flipped a coin three times and it came up Heads all three times. It may seem like that coin always comes up heads, but if you flipped it enough times, the true 50/50 odds would be revealed. And the same concept is true with Thursdays. Having three bad Thursdays in a row does not mean the market is more likely to go down on Thursdays than up. It's just not enough information. Zooming out can help us apply rational thought to what might otherwise be emotion-driven reactions.
I haven't taken on any new positions yet today. I did buy stock for GPN in the main account after yesterday's email.
If you have any questions or feedback, I'd love to hear from you.