Despite volume coming in lower than the 50 day average, stocks advanced.  We continue to see a plethora of stocks setup, breakout, and add to gains.  It is very important we continue to see this type of action from the stocks we are following.  Crude oil slumped once again, but with an afternoon rally the commodity was able to close well off its low of the trading session.  The lone economic data point on the session was the NAHB housing sentiment index and it came in better than expected.  Whether or not it helped send stocks higher is of no use to us as long as we follow the one true indicator:  price.  A good start to the week and with all this great action we are nearing maxing out our accounts.

Our chat room had an interesting conversation regarding how to handle positions.  There are plenty of theories out there, but one we believe maximizes your profit potential is pyramiding.  Too often we see traders thinking they are pyramiding a position, but they have actually used a reverse pyramid strategy.  On entry, you do not enter a smaller position size and increase as you add to your position.  For example you do not enter a 3% position size then on an add use a 5% add.  Successful pyramiding you simply start with a larger base and buy in smaller increments.  Pyramiding is pretty simple, but super effective when implemented properly.

Today’s rally was quite impressive led by the Russell 2000.  The clear winner continues to be the NASDAQ 100 as it continues to hit highs.  An interesting note is you do not hear too much about AAPL surging back to par or what would have been $700 pre-split.  The stock has quietly pushed higher without much fanfare.  GOOGL continues to hammer out a handle while PCLN is trying to regain its footing.  FB remains really tight waiting on a push from buyers.  TSLA is struggling with its all-time highs at the moment, but not really flashing a big sell signal yet.  We have plenty of other stocks we are following and getting long.  If you are struggling to find quality stocks come join us in our chat room!

Wednesday we will see what was discussed at the last Federal Reserve meeting.  It should feed the news scraping algorithms something to make the markets go haywire for a few minutes.  We prefer to let the dust settle and following our trading plan.  It is important you follow a solid plan identifying entries, position size, and exits.  Without a plan you are destined for failure.  We can certainly help!!!