Why does a stock price that rallies throughout the day and through the night open lower

B

bmoney

Date reference: traded on Jan 2

Title says it all. I had several in the green swing positions open using a new scan I made for finding stocks. Some examples of stocks I traded were aapl, msft, and AMD. All of these positions ran green through the night, but when I woke up this morning, they all opened in the premarket down by a significant amount. Now, instead of being overall very net positive, I’m now red, and am losing on most of my winners that were up several points. Could someone with knowledge about this explain to me why this happens? Is this some sort of market correction? It happened so reliably to all of good positions, and I would like to avoid moments like this in the future and possibly play it for short term profits. Thank you for any insight anyone has in this.
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There are practical explanations for that, but in this business, information is the product.

The only advice that i could give you,
is to have an extra 500 - 1000 hours of screen time,

in 2020.

Maybe you would find, some correlation, in the overall market movement and those three.
 
bmoney said:
I would like to avoid moments like this in the future and possibly play it for short term profits.
More...

Financial markets trade 24hrs during week days. The US market is open only ~7hrs of that. Anything that happens or is said by an influential somebody can mover the markets while the US is closed.... thus, gaps on US opening.

Stops may be advised for leveraged overnight positions. They won't necessarily protect you much depending upon the magnitude of overnight developments. (That is, if the news is big enough could blow right through your stops.) Many leverage players don't hold overnight because of this.
 
well in this instance there was an actual event overnight... but based on the buying pressure shown by the price action, a gap down is a screaming buy.
 
bmoney said:
Date reference: traded on Jan 2

Title says it all. I had several in the green swing positions open using a new scan I made for finding stocks. Some examples of stocks I traded were aapl, msft, and AMD. All of these positions ran green through the night, but when I woke up this morning, they all opened in the premarket down by a significant amount. Now, instead of being overall very net positive, I’m now red, and am losing on most of my winners that were up several points. Could someone with knowledge about this explain to me why this happens? Is this some sort of market correction? It happened so reliably to all of good positions, and I would like to avoid moments like this in the future and possibly play it for short term profits. Thank you for any insight anyone has in this.View attachment 216228
More...


The US stock market is actually open 16 hours per day 5 days per week on normal trading days.

Eastern time zone:

4:00am to 9:30am ( 5.5 hours premarket)

9:30 am to 4pm (6.5 hours regular trading session)

4:00pm to 8pm ( 4 hours after hour)


In your scenario, your stocks simply reacted to a new event that happened after the market closed. Today, at one point premarket Nasdaq future was down more than 1.5% so it is expected that most stocks will gap down in the premarket session.
 
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