At least for now Greece is not in default and sent into a death spiral. European stocks jumped the most with the German DAX jumping more than 3%. The US indexes benefited from the rise in European shares, but didn’t get the price gains. Volume was lower across the board as Friday’s option expiry boosted turnover. NASDAQ led all market indexes today. Dow lagged the major indexes. The index has made very little progress unlike the Russell 2000. AMBA continued its free fall as Citron Research published a bearish price target. We continue to push higher despite the negative news and rhetoric from the financial news. Regardless of what CNBC has to say we simply follow price.

The comedy show that has become Greece is a sad news story. A country that is on the brink of a financial disaster and those who get hurt will be the poor. As for the effect it will have on the markets is anyone’s guess. We can only act with the information the market has provided us. Anything else is simply a guess. While we can name off numerous macro risks our price signals continue to point to higher prices.

A lesson learned by many traders today or should we say “should learn” today was how important stops are in individual stocks. AMBA was absolutely decimated after Citron Research published research and put out bearish price targets: 12 month – $60 and 18 month – $40. Stock prices typically do not fare very well post-Citron. Today, AMBA was absolutely clobbered and was a stark reminder having a stop in place is essential. At least on chat room member had puts to protect gains and we had a $108 stop on majority of our position. Go to our register page and sign up to see where we are setting our final stop loss. AMBA just another lesson to learn in the stock market: exits are just as important, if not more as entries.

Something to keep an eye on is the Shanghai market as it fell more than 6% overnight. Its high was set on 6/12 and the index is now nearly 700 points off its high. The index is now below its 50 day moving average. Selling volume has been shrinking, but price declines are hefty. I know Greece is in focus, but the Greece is old news. Something is going on in China and it will be interesting how it translates across the globe.

2015-06-22_Shanghai_daily

We continue to execute our trading process. Let’s see what tomorrow brings us!