Greece continues to dominate the headlines and the US Stock market continues to push aside the risk. PCLN was a big driver in the NASDAQ’s move today as the index closed in positive territory for the seventh straight session. Volume dropped on the session as the S&P 500 and Dow consolidate their recent gains. We have yet to see the NASDAQ consolidate its recent gains and at some point it will happen. Our market remains in an uptrend and while we are in overbought territory we can remain here for a very long time. Stick with the trend and do not let your opinions get in the way of your trading.
A few years ago the thought of Greece leaving the European Union would have been devastating to the market. Now, it simply does not matter. Today’s headline stated Germany rejected Greece’s extension would have sent the markets in a tailspin. What we have now is a situation where our market simply does not care whether or not Greece stays in the European Union. It pays to stick with the trend rather than forming an opinion.
Sentiment continues to favor the bull camp and it is quite easy to see with the market near highs. AAII bulls jumped to 47% while bears fell to 17.88%. A large spread and when bears dip below 20% we typically see the markets pull in. II Bull and Bear spread widen more than 40 basis points this week with bulls at 56.6% and bears at 14.1%. II survey typically favors the bulls much more than the AAII survey. NAAIM remained in the 80s this week closing the week with a reading of 87.81. Bulls aren’t at extremes, but with bears nearing lows it does suggest this market in the short-term will likely move lower. Our overall trend is higher and it will take more than just sentiment to end it.
A bullish sign for this market was the move by FB today in tremendous volume. It is a very good sign when a stock of this caliber makes a bullish move. Despite the odds are we continue to consolidate and move lower a bit stocks like FB does give us confidence we still have plenty of upside left in this market.
Tomorrow’s option expiry will certainly push volume higher and cause individual stocks to act funky. It will be difficult to gain much from tomorrow’s move from a volume perspective. Do not be fooled by the intraday noise caused by option expiry. Stick with the game plan.
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Be safe and enjoy the weekend.
