Today’s session was relatively quiet in terms of the volatility we have seen over the past 30 days. Recently, we have seen overall volatility decrease where we are not seeing wild intrday swings or big gaps at the start of the session. Lower volume across the board does give some pause, but we are not yet overly concerned with this situation just yet. Only have the NASDAQ and Russell 2000 attempted to consolidate gains. It begs the question when the S&P 500 does consolidate what will it look like? Time will tell, but we need to continue to execute our plan despite what others may think. This uptrend no matter how vertical it has been is still in place and we continue to find new longs. Stick with the trend it will pay in the end.
We certainly can agree with regards to the S&P 500 and how it has yet to consolidate its move off the October lows. Perhaps it does defy logic, but can we really expect anything less from a market manipulated by HFT and Central Bank activity? Many can argue whether or not Central Bank actions have propped the market up or not. One thing NANEX has been able to prove is HFT certainly has caused havoc and should be reigned in. For those beliving Central Banks are not influencing equity markets ask yourself this question: would corporations be funding stock buybacks with record debt issuance if the fed funds rate was above 100bps? Of course you have to answer that truthfully if you truly want the right answer. Buybacks would still occur as we are not suggesting they would cease to exist. One has to wonder if the amount of buybacks would be at the same rate if the Fed Funds rate was above 100bps.
Like last night we have more new longs for our members tonight. We all know the first big mistake any trader can make is not cutting their losses. The second biggest mistake is missing out on potential big winners. You need both sides of the coin to be successful. Limiting your upside by selling too early or not even taking the entry in the first place is harmful to your trading account. Never miss a beat and never miss an opportunity to add to you gains.
Stop trying to make sense of this market and start taking advantage of it. So often many want to reason with the market only to see their trading accounts evaporate before their very eyes. Stop thinking and start doing.
