The Dow Jones led the market lower as earnings continue to be in focus. IBM was a big drag on the Dow along with the VZ. Volume was mixed as NYSE volume was higher due to earnings. Perhaps a little damning is how small cap stocks have been lagging the overall market. We have been in overbought territory so it is no surprise we moved lower. We are still in an uptrend, but given how AAPL and MSFT reacted to earnings we may have an issue. Stick with the process as we continue to work our way through earnings season.
AAPL and MSFT are two behmoths within the stock market averages. Given where they were trading in the after-hours session tomorrow morning will not be too much fun. It does not mean everything else will follow suit, but the indexes will suffer some damage.
It is important to continue to work through your risk management process. If you are over exposed with position sizes that are too large you will be exposed. Cut your losses by using a solid exit strategy. Entries are not the most important piece to the puzzle. Size matters and knowing when to exit are most important!
Tomorrow morning will be fun!
