From the Trading Desk

Stocks Advance Ignoring a terrible Chicago PMI reading

Closing out the month of April stocks were able to go out on a green note. Volume was hot throughout the day and did not need the surge of volume at the end of the day to eclipse Monday’s level. What is normal for this market is for us to see volume not accompany price. We are in a QE driven market where anything is possible. Case-Shiller release saw home prices gain more than expected, but the number failed to give a boost to the futures. Shortly thereafter, the Chicago PMI number was release and the number fell below 50. The market was able to find its footing after consumer confidence jumped more than expected. It was off to the races to new highs on increase trade. At new highs it is hard to argue with the market. Stick with it.

Economic data continues to be very disappointing to say the least. Consumer confidence was nice to see a better than expected reading, but for the Chicago PMI to hint at contraction is not a good sign. Is the Sequester to blame? Or simply the business cycle at work. Wednesday we’ll get a read on the ISM manufacturing index and should give us a further indication of what kind of employment report we’ll get Friday. Today’s Chicago PMI figure hinted at a weak employment report. It is anyone’s guess how this economy will push forward. For now, it remains weak.

There are a few names out there that continue to look solid and primed to continue to move higher. TSLA has been soaring, but today’s move appears to put in a short-term top. NOW was an earnings winner, but while holding the breakout low has nearly given up all of its gains. DDD broke out today, but not from a solid base just yet. The stock is in a deep base and if it is going to build a handle it would need to use today’s high to begin building one. On the positive side it is headed in the right direction. Another earnings player this week will be FB. The stock has been quietly rounding out in tight price action and possibly setting up an earnings gap opportunity. Anything is possible and it is up to you to take advantage.

Tomorrow’s Federal Reserve release will be the focus of traders and will likely provide a few fireworks. It is anyone’s guess how the market will react. Stick with price and just execute your rules. Cut your losses and ride your winners.

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