A solid session to begin the week as Greece gets a deal and the market has three new horsemen. Over the weekend Greece was taken to the woodshed approving a deal the Greek people voted down just a week ago. The market did no care whether or not it was a good deal or a sustainable one. It just wanted one even if it kicked the can down the road a little bit. Price action was once again solid and we have decent market leaders. The question will be whether or not this current market leadership can continue with their recent gains. Today’s session was a good way to start the week and our focus on market leaders will have all our attention.
There are the three amigos in this new market rally: FB, AMZN, and NFLX. All three pushed higher today continuing relatively strong patterns. FB broke free from a 3 week tight formation (highlighted this morning for our platinum members this morning). NFLX was finally able to get back above its highs where Carl Icahn announced he had sold all his shares. Oops – a bit too soon. Although, he did make a grade trade with the stock. AMZN broke free from a square box pattern on higher than average volume. These big three stocks will be a barometer for this market. It is best to pay close attention to these leaders.
Market ETFs QQQ and IWM retook their respective 50 day moving average. Volume was lighter than average on both, but we have seen this story play out before. Volume typically has not mattered in this ZIRP and QE environment. SPY had a good day, but found it could not get above its 50 day moving average. The money is moving into QQQ and IWM names and its best to concentrate in what is working rather than what is lagging. Stick with winners.
There is always a chance this market will roll over and head lower. No one knows the future and trying to predict the future always leads to trouble. For now, we remain with a long bias in our portfolios as that is what we are receiving in price signals. A simple process with a robust money management system will yield us with incredible results. It is the bottom line.
This market does appear it wants to continue to push higher despite the negativity surrounding the market. In the end, price pays and it pays to pay attention to it!
