The day after the NASDAQ hits 5000 for the only third time in its history distribution hits the very next day. It was not all bad news as the NASDAQ Composite was able to close above its mid-point of the session. Volume fell on the NYSE as the S&P 500 escapes its 4th day of distribution. It was nice to see the market find support off the lows, but we will need to avoid follow-through on this selling. We have our stops in place and if this selling continues we will be protected. One day of selling does not make a market either. Further distribution will flip our bullish stance, but for now we remain in an uptrend.
There were not too many breakdowns today of note, but one in after-hours to take note of. VEEV had a terrific day only to find itself struggling down nearly 13% in the after-hours session. Aside from VEEV we were able to find a few new longs. A good sign would be to continue to see our longs perform well. If they stumble and sells are triggered it will be a signal our uptrend is in jeopardy. Until we have evidence piling up against this uptrend there is no need to deviate from the plan and kill our chances of great gains.
The best case scenario is we consolidate in lighter volume and push back into new highs shortly. Remember, we exploded more than 6% in February and it would not surprise us to digest these gains. This market could probably handle another day or two of distribution given the run we have, but we cannot have it pile up more than 5 or 6 days. At the moment, the NASDAQ has only two days and the S&P 500 has 3. If we do see distribution pile up and our stops getting hit then we will change course. Until then we will continue to stay long.
One piece of economic data everyone will be looking ahead to will be the Jobs report. Unfortunately, the Federal Reserve has minimized the once important report. Of course, economists will be falling over themselves to predict how many jobs created. Then, they will be on CNBC and Bloomberg discussing what the report means. All of this is designed to distract you into watching these business channels. Our focus will be on our process rather than the noise.
Stick with the game plan!
