A quiet day for economic news for CNBC and Bloomberg as they continued their focus on the NFL’s handling of the Ray Rice situation. AAPL was able to climb higher today after yesterday’s roller coaster ride. The stock was able to push the NASDAQ higher despite the light turnover. While it was not the greatest of days it still was pretty good considering we have had two big distribution days in the last six days. Had we taken out Tuesday’s high with some volume would have been impressive. Until we see new highs we will continue with our hedging strategy. This uptrend still remains on shaky ground and we will need to see new highs soon if this market is to continue higher.
One major factor we may not see this market head lower would be the Federal Reserve meeting kicking off next week. At this point their plan is pretty well known and it is highly unlikely they will deviate much from the plan. This last round of Quantitative Easing is set to expire at the end of October and rates will not begin to rise until late second quarter of 2015. It is pretty cut and dry. Until rates rise more than 50 basis points it is unlikely we will have a serious correction. While we say unlikely it is not out of the realm of possibilities. Price will always be our number one signal. However, we must be prepared for anything. At this point Zero-Rate-Interest-Policy (ZIRP) will stay in place for at least another 8-10 months.
We did see some nice moves today in the market. In fact, we have three new longs for subscribers tonight. Certainly a good sign when you get fresh signals. Another nice sign was to see one of our holdings PANW push into new high territory. While it did its fair job of trying to shake the majority of its holders out we were able to hold on to grab today’s move. It pays to stick with your plan than to panic and sell out of the stock completely.
Our chat room continues to find stocks moving. There are a few stocks coming off their lows looking pretty good. CVLT is just one of the few we are looking to take advantage of and when these type of stocks run they run big.
There is another stock our chat room has been on top of and that is QIHU. Unfortunately, it is not on the long side. The stock is looking like it wants to head lower, much lower. We are not going to go out and try to catch this falling knife any time soon.
It may take this market a few more sessions before it can resume a move higher. We have the Federal Reserve next week and we certainly do not have expectations this market will move much prior to the conclusion. Until then, continue to stick with the game plan and execute.
