The standard blueprint of this market over the last few weeks has been where the market gains traction only to see it slip away into the mid-day session. To the rescue, buyers step up pushing the market back to the highs of the session. Once again, the blueprint was applied and we were able to see the markets back to the session highs. Small caps were the big winners of the day with the Russell 2000 closing at $727.15 +13.50 or 1.89%. Volume on the NASDAQ composite and the Russell 2000 were above average a sign of institutional strength. We have missed the institutions as of late and they were active in the NASDAQ and Russell. A solid close today puts another positive spin on the market.
It was nice to see a REAL accumulation day in the market. Despite the lackluster quarter from AMZN and a few other old leaders, institutions were out buying up shares of stock. Even with record low amounts of cash (~3.5%) for mutual funds, the market was able to find institutional buyers. While we haven’t seen an all-out go signal by the market it continues to defy the bears!
Tomorrow will be an important day for the market pundits at FBN, CNBC, and Bloomberg with a reading from third quarter GDP. Estimates range from 2.1% to 2.5%. Second quarter GDP was quite dismal, but better than expected at 1.3%. We aren’t about to guess what the number will be, but we’ll be more interested in seeing how the market reacts to the reading. We continue to wait for an all-out buy signal from the market to be full invested and understand prudence will pay off in the long run.
Earnings season has been a real good time so far. Profit warnings for the fourth quarter are up, but the market doesn’t seem to care all that much. A few big, old leaders like AMZN, PCLN, and AAPL are showing kinks in the armor here and they must be watched. NFLX and GMCR have shown why you need to cut your losses. Even DMND a recent breakout has been hit hard. Cutting your losses is an integral part of investing/trading. Make sure you have a sound exit plan in case the market moves against you.
“Luck is where preparation meets opportunity.”
Seize your opportunity.
