From the Trading Desk
Void of economic releases the market did get showered with more than $3 billion in asset purchases from the Federal Reserve. A hiccup in the morning was quickly support as the Federal Reserve Open Market Operations flooded the market with fresh new cash. Over Europe the DAX closed in the green for the 11th straight [...]
Heading into the week the US market once again watched the Nikkei continue to move further into the stratosphere. Futures were pretty anemic heading into the trading session today. Overnight news focused on the plunge in precious metals as Silver and Gold were hit hard. Despite the negative open and sentiment both precious metals were [...]
The Big Wave Trading Portfolio remains under a BUY signal and currently has zero issues weighing on it presently. On the short-term the market is very extended in price compared to trailing key moving averages. Logic dictates that a natural pullback to some form of support levels (fibonacci, price lows, or a moving average) should [...]
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NASDAQ Drops Below its 50 Day Moving Average while AAPL finds Support
The selling continues to be concentrated in technology stocks lead by AAPL, GOOG, PCLN and others. Another day of distribution and they have now piled up to where we are no longer in our uptrend. Today’s selling pushed us into a short-term oversold condition, but it is clear sellers have ruled the day. One bright spot on the day’s session was buyers finally stepped up and supported AAPL at today’s lows. Distribution has piled up to high and raising cash is a prudent move here. While this market may be able to reverse its fortune here it is never a good idea to trade on hope.
At the moment the market does not believe QE forever will help out stocks. Remember, after QE2 the market corrected only to resume its uptrend. November of 2010 was the month where the turnaround occurred. Is this time any different? Time will eventually answer this question, but we have to respond with what we have in front of us. Right now we have a market with a bunch of distribution days piled up high. Caution is warranted and to achieve this raising cash is an excellent way to accomplish this task.
We are a bit oversold at the moment and it is easy to see why. It would not surprise us one bit to see this market push back higher before making another leg down. Conversely, we could just rocket higher and resume the uptrend. Earnings season is now upon us and will provide major headwinds for this market. Earnings this quarter are set to be the worse since 2009 and will be a major drag on any chance an uptrend may reemerge. Stick with price action and right now it says to be cautious and raise cash.
Cut those losses short and where you have exit signals in profitable trades you must obey!