Early morning selling was quickly erased when news wires caught a headline Greece was coming back to the table with its creditors. Whether or not a deal comes to fruition is anyone’s guess. However, we cannot argue with a big price reversal with volume behind it. Bonds did rally with the market moving lower, but gains were halted as the market was able to recover from its morning losses. It certainly does feel like this market is desperate for a deal for it to move higher. Today was a solid session for bulls and if we get perceived positive news from Greece there is no reason we cannot push higher.
Market sentiment certainly says we can push higher with many are bearish on the market. More than likely they have been watching CNBC listening to the noise coming out of Greece and China. The Shanghai has been decimated with majority of its gains ripped apart from the recent selling. There is a lot of negativity circling this market it would not surprise us to see some sort of rally. Let’s not forget this quarter’s earnings is supposed to be very weak. Earnings kick off with Alcoa and then the big banks.
One thing we certainly are going to be aware of earnings dates. We are not going to gamble ahead of earnings reports. There are plenty of ways to protect yourself ahead of earnings. One of our chat room members will sell calls against his position. Others will simply sell ahead of earnings. If you are sitting on a big gains you have wiggle room. More importantly, if you are positioned properly you will not be overexposed. If you are without a risk management process it is time you implement one pronto! Bottom line is know your earnings dates.
There were quite a few breakouts today. We do have a few new longs for members. Never a terrible sign to see new longs. Now, if they fail then we have to take notice. Until then it is steady as she goes.
This market is full of surprises. One moment it appears all hell is about to break loose. The next we have a big rally on big volume. Stick with Big Wave Trading.
