NEW YORK (CNN/Money) -
This just in: U.S. stock markets plan to institute summer hours. They'll open up for half an hour in the morning, then shut down until about 3 p.m., when they'll open for another hour.
Not really. But recent market action might seem to argue for such a plan. On Wednesday, for example, stocks traded in their typical summer doldrums all day before suddenly enjoying a pop, on robust volume, just before the close.
Many analysts believe this is simply a continuation of a typical market pattern. Individual investors are active first thing in the morning, reacting to the news from the early morning or the night before. Late in the day, program trades kick in, and professional traders get active, making bets on what the market will do the next day.
"If people are getting bullish for whatever reason, over time, that means they're going to expect tomorrow to be higher," said Phil Roth, technical market analyst at Miller Tabak & Co. "If so, you want to be in there today. The buying at the end of the day reflects the idea that people think it's going to be better tomorrow."
Early on Thursday, however, that bet was wrong. Due in part to weaker than expected reports on durable goods orders and weekly jobless claims, along with an eruption of further violence in Iraq and elsewhere in the Middle East, the market returned to its torpor.
But analysts suggested it might be a good idea to wait to see how the pros traded in the last hour of the day to get an idea of the market's real direction.
"Wednesday was a pretty good day. For that to continue, I would expect a recovery [on Thursday], and ideally in that last hour of trading," said Paul Nolte, director of investments at Hinsdale Associates in Illinois.
"We may have broken out of our trading range, but we would like to see some follow-through before we commit additional dollars to the market," Nolte added.
Stocks have been stuck in a tight trading range since peaking earlier this year, hounded by fears of inflation, higher interest rates, higher oil prices and violence in Iraq and Saudi Arabia.
A late-May bounce was met short-lived, thanks to the onset of summer. Many traders apparently headed for the beach to wait for June 30, when the Federal Reserve meets to decide the course of interest rates and the keys to Iraq are handed over to an interim Iraqi government.
Though Wednesday's late rally, driven apparently by the professional traders, who ought to know what they're doing, could be a hopeful sign that the summer doldrums are breaking early, it's still too early -- and the world's uncertainties still too plentiful -- to declare the onset of a summer rally.
Wednesday afternoon might simply have been a quirk, driven by one-shot news, such as the announcement late Tuesday by SBC Communications (SBC: Research, Estimates) of a multi-billion-dollar spending plan.
"I think the capital spending news from the telecoms lit a little bit of a fire under some of the pros, and people started acting on it," said Steve Shobin, technical analyst and president of AmeriCap Advisers. "I don't know if it was pivotal in terms of the short-term market direction."
"Whether or not it's a signal that the bull market is resuming or a one-time-only event is something we'll know only in retrospect," he added.
Still, Shobin and some other analysts believe the market is poised for a short-term rally.
Has it already begun? Tune in at 3:00 p.m. ET for a clue.
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