What people who don’t lose in the summer market know──

Complete guide to Friday close buy・Monday open sell

I often hear the saying, “Summer is a time to lose in stocks.”

In August, the market tends to become wild, and many people return from vacations with unrealized losses.

Many of you probably remember the historic sharp drop in August 2024.

Back then, the Nikkei Stock Average fell by about 7,000 points in just three days.

So, is the summer market a minefield you must avoid?

The answer is “no.”

More precisely, it’s dangerous when you trade without any criteria.

The summer market indeed has inherent risks.

But on the other hand, there are occasions where you can take advantage of seasonal demand-supply distortions.

This article will honestly explain both sides.

The current theme isOvernight trade of “Friday close buy・Monday open sell”.

It is a method that targets a gap up at Monday’s open after holding through the weekend for several hours.

It may look simple at first glance, but in reality many factors are intertwined: market conditions, candlestick patterns, news, stock selection, and seasonality.

Combining these correctly and only taking positions on days that meet the criteria is a key point to raise the expected value.

■ Market anomalies from June to August

First, as a foundation, let's grasp what kind of character the three-month period has.

经验則としてのアノマリーは絶対的な法則ではありません。

However, by understanding past tendencies, you can improve your judgment on when to “enter” and when to “be cautious.”

【June】

・ At the beginning of the month, demand-supply tends to deteriorate due to dividends and shareholder benefit deductions.

・ The US FOMC meets frequently, and volatility tends to rise around announcements.

・ At month-end, pension funds and institutional investors tend to rebalance with buying.

・ The “Sell in May” trend may continue, with selling by foreign investors.

【July】

・ Expectation buying tends to come in ahead of the April–June earnings announcements.

・ Around the US Independence Day, market participation tends to thin out, leading to light trading.

・ From mid-month onward, US corporate earnings announcements intensify, causing larger moves in individual stocks.

・ This is also a period when the market begins to transition into the summer lull.

【August】

・ Known as a month prone to historically large declines.

・ During Obon, domestic investors’ participation decreases, and the market tends to be driven by foreign investors.

・ In the thinly traded market, hedge funds often undertake unwinding sales.

・ There is a higher risk of yen appreciation and stock price declines progressing simultaneously.

Anomalies are tendencies, not laws.

What matters is not simply thinking “June is safe” or “August is dangerous,” but

understanding each month’s characteristics and combining them with individual conditions to make judgments.

■ Logic of Friday close buy・Monday open sell

The reason this strategy can work lies in demand-supply asymmetry.

Many institutions and funds dislike holding positions across the weekend.

Because there is a possibility of unexpected news or geopolitical risks during the weekend.

As a result, profit-taking or position-clearing selling concentrates before Friday’s close, and prices may close a bit cheaper than their intrinsic value.

On the other hand, Monday morning open reflects overnight futures and U.S. market movements.

When market conditions are stable, buying back often occurs as a correction for the over-selloff on Friday.

This demand-supply adjustment creates the so-called“gap up”.

This is the basic idea behind the Friday close buy・Monday open sell strategy.

However, in the summer, the opposite risk also increases.

There are periods when weekend bad news causes a large gap down on Monday.

That’s why this strategy is not about “trading every week,” but about

“executing only on weeks when the conditions align.”

What determines win rate is not trading skill butmarket selection before entry.

■ Reading candlesticks—the core of entry decisions

From here, we finally move tothe practical section. Exciting, isn’t it!

I will teach how to choose stocks and how to tell when not to enter

and how to determine the right timing to enter.

If you know this, even in the difficult summer market commonly called the “summer dryness,” you will be more likely to find a time to profit.

When looking at candlestick shapes, the first thing to check is the ratio of body length to upper and lower shadows.

For positions held across the weekend, the closing candlestick is the last testimony of the stock’s demand and supply.

From here onis paid. If you feel a connection to your investment life,

purchase it and learn the essence of this investment method.

Read it again and again to firmly memorize this pattern.

[Japanese Stocks] High win rate! Weekend-only overnight trade