Last night, the New York Giants defeated the New England Patriots in the highly anticipated Super Bowl. The game was watched by more than 100 million viewers. The day after the Super Bowl should simply be declared a national holiday in the United States. Many stores could hold sales and promotional events to try and generate business leading up to the game and even the day after the event. Here are the three reasons why the stock market should be closed the day after the Superbowl:
1. Lack of Productivity. Often, after such a big event workers will call in sick or even show up late to their job. The bottom line is that productivity simply drops even if someone does show up to work, they will likely be tired or even have a hangover from too much drinking. Many stock market fanatics such as myself look forward to Monday mornings, however, all seasoned traders know that today is going to be a very slow trading session.
2. Trading volume will be much lighter than usual. If you are a trader you already know that the trading volume has been ridiculously light since December 19, 2012. Well, today the trading volume just got lighter. The SPDR S&P 500 Index (NYSEARCA:SPY) is trading just 77.6 million shares as of 3:15 pm EST. Even the trading session after the Thanksgiving Day holiday the SPY traded 99 million shares, that day was a half day trading session. So you can all see how light the trading volume actually is today.
3. There will be more institutional game playing. The retail investor is usually the last person to make money in the stock market on a normal day let alone a light volume day. The retail trader will usually be the trader that buys the media hype. Often the rally or decline in a stock will be over before it is known by the public or retail investor. Retail investors that try and play in these light volume markets will often find that they are out of the money rather quickly. The reason is because the institutional traders know that this market is very easy to move against the crowd. The institutions control the volume. Think about how many retail investors were hurt today by selling stocks such as Express Scripts Inc (NASDAQ:ESRX), or Medco Health Solutions Inc (NYSE:MHS) at the low of the day only to see these two stocks reverse sharply off the intra-day lows.
Next year the stock market should be closed the day after the Superbowl. The powers that be should simply make this a national holiday in the United States. The productivity by the workforce is just not worth keeping the markets open.