A late day rally helped kick the month of February off with solid gains across the board. Led by energy the S&P 500 closed higher by 1.3%. The Dow Jones Industrial average followed up with a gain of 1.14%. Lagging the session was the NASDAQ and Russell 2000. Economic data was nothing to cheer about as ISM disappointed the market. What appeared to jump start the end-of-day rally was news regarding Greece’s debt situation. At the end of another volatile session stocks were higher in lower turnover. While we would have like to see volume expand on a day like today we do have day one of attempted rally. We will look towards the middle to end of the week for a confirmation of a new rally. Today was a good start to the week and month, but it will take a bit more to work ourselves into a new confirmed uptrend.
Greece was certainly a news item the news scraping algorithms were looking for to boost the market in the afternoon session. The move was certainly fitting to the type of market we have seen since the December lows. The spread between the high and low today is not something out of the ordinary for the type of market we have. We would love to see this market tighten up and break higher. At this point it is hard to have much conviction in either direction. Until we see a break in either direction we will not get overly excited as many on Twitter. Today is just one day and it will take much more to confirm a new uptrend.
Once again this market was able to bounce off the most recent lows. While it was not on tremendous volume we were able to find support. The unfortunate news so far has been this market’s inability to push into new high territory. We continue to remain in a consolidation pattern and lack any direction. It will take breaking free from this recent consolidation for a new trend to be set in place. It did appear at today’s lows it was going to be the downside. The last minute kick save put off a potential downtrend for now. We will continue to be patient and execute our strategy.
As we operate in a volatile environment our risk management strategy is crucial to our success. Many are getting chopped up as they are unable to handle the volatility. There are many ways to handle volatility and overtrading with large position sizes is not one of them. Overtrading will simply drain your trading account severely hampering your ability to take advantage of the next big trend. Do not miss your opportunity.
February started off on a good note for stock market bulls. Let’s see if we can gain some momentum to the upside.
