In life, it is said that you get to choose your friends but not your family. In the markets, I would adjust the axiom just slightly. You get to choose your moments but not your company. 

On any given day, we encounter all kinds of investors with differing objectives in the markets. There are the Warren Buffet and institutional types, dug in for the very long term. There are swing traders tuned to a more intermediate-term time frame. As an example, we designed the Navigator Core Strategy for swing trading. There are day, hourly, and even 1-minute time frame traders.

For the most part, day traders are usually the weakest hands in the market. Typically, they are less adept, inexperienced, over-leveraged, and undercapitalized. On a low volume today, such as today, you can usually assume that the only players at the table are the day traders or weak hands. The NYSE volume was only 20% of Friday’s volume this morning and about half as I write this.

So what happens next in these circumstances? Take a look at the red bars on the 5-minute chart below: