"On the evening of Sunday, January 25, the stock market was closed but futures contract traders were quite busy. Indeed, S&P 500 futures plummeted in late-night trading due to international tensions over Greenland as well as worries about snowstorms. Yet, both the S&P 500 and the tech-heavy NASDAQ 100 were in rally mode the next day, when the stock market was open again. Inexperienced investors may have been shocked at this turn of events, but it's nothing new to a seasoned pro like Cramer."
""I have seen this Sunday night future plummet so many times in my career that you would think the stock market would be dramatically lower, not up," Cramer declared, "since the S&P futures started trading in the 1980s." He further observed that S&P futures contract price trends "often represent the sum of all of that weekend's fears and nothing positive at all.""
Late-night S&P 500 futures can plunge because of geopolitical tensions or weather worries, yet the cash market can rally once trading opens. Futures often aggregate weekend fears and may not reflect positive developments. Overnight futures movements should not be interpreted as definitive predictions of next-day market direction. Stocks generally move on fundamentals and corporate earnings rather than simply investor mood. With earnings season beginning and major technology companies reporting, richly valued, high-flying stocks may warrant profit-taking and disciplined positioning ahead of potential volatility and quarterly results.
Read at 24/7 Wall St.
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