Are we in LAZY FEBRUARY traders?
Q. "I heard that there is a phenomena called “Lazy February”. Could you explain why it’s called that and what I should watch out for as a trader?”
A. I have not heard that term in eons! Here’s my 10 cents on how Lazy February got this name.
Short month effect
February is the shortest month of the year.
And because so much happens in February, many investors like to play it safe and observe.
Most investors tend to wait for March when the markets have chosen a direction, earnings are out, taxes are paid and they are ready to invest again.
Year-end position squaring
Traders often close out their positions at the end of the year right through to January.
And this is for accounting, performance evaluation and tax purposes.
This process is known as "position squaring”.
But the big influencer is tax.
Closing off the tax year
In many countries, February is a time when individuals and corporations start preparing for tax filings.
And this can influence investment decisions which can lead to either selling their positions or adjusting their portfolios for tax efficiency.
After February and going into March, we should see a higher volume of buying and investing in the markets.
Earnings season
February is also known for major earnings releases – Especially in the U.S.
Investors during this period prefer to watch and observe. This way they’ll be able to see the forecasts versus the actual results.
Once the numbers are released, that’s where they’ll have more of an idea of what they want to invest in and what to buy or sell in March and the coming year.
A. I have not heard that term in eons! Here’s my 10 cents on how Lazy February got this name.
Short month effect
February is the shortest month of the year.
And because so much happens in February, many investors like to play it safe and observe.
Most investors tend to wait for March when the markets have chosen a direction, earnings are out, taxes are paid and they are ready to invest again.
Year-end position squaring
Traders often close out their positions at the end of the year right through to January.
And this is for accounting, performance evaluation and tax purposes.
This process is known as "position squaring”.
But the big influencer is tax.
Closing off the tax year
In many countries, February is a time when individuals and corporations start preparing for tax filings.
And this can influence investment decisions which can lead to either selling their positions or adjusting their portfolios for tax efficiency.
After February and going into March, we should see a higher volume of buying and investing in the markets.
Earnings season
February is also known for major earnings releases – Especially in the U.S.
Investors during this period prefer to watch and observe. This way they’ll be able to see the forecasts versus the actual results.
Once the numbers are released, that’s where they’ll have more of an idea of what they want to invest in and what to buy or sell in March and the coming year.
✅ Facebook:
facebook.com/groups/matitrader
🌐Website:
timonandmati.com
𝕏 (Formerly Twitter):
twitter.com/timonr
Trade Well,
Timon Rossolimos
Founder, MATI Trader
(Pro trader since 2003)
facebook.com/groups/matitrader
🌐Website:
timonandmati.com
𝕏 (Formerly Twitter):
twitter.com/timonr
Trade Well,
Timon Rossolimos
Founder, MATI Trader
(Pro trader since 2003)
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