Welcome to a holiday shortened week with a half day on Friday capping the week. The market was met with disappointing economic data as all releases missed their expectations. Buyers pushed the market higher, but were unable to sustain the higher prices. Volume was like all other Mondays lower than Friday’s levels. However, small caps were able to shake off the larger indexes selling off and close positive on the day. Lagging for much of the rally it was nice to see the Russell 2000 outperform for once. Historically, this week tends to be a positive one with small gains. We are not expecting this week to be any different. For now, our trend remains in place and we continue to see positive action from our holdings.
Diving into the S&P 500 action Utility stocks had a rough time with the group down 1% as a whole. Consumer Staples and Energy names enjoyed gains on the session. Energy was boosted by a reversal in crude oil prices this morning after comments from Saudi Arabia’s leadership. Venezuela is on record saying crude is about to slip to $20 a barrel unless OPEC acts now. Crude oil is receiving support at $40 a barrel, but remains in a significant downtrend. Food Beverage and Tobacco stocks helped the Consumer Staples sector move higher. Funny to see Utilities and Consumer Staples mover in complete opposite directions as the two are seen as defensive sectors. There is nothing more exciting than when food leads the market in gains.
As earnings season comes to a close we certainly learned once again large cap NASDAQ names continue to dominate. It would be nice if we could see the Russell 2000 take over leadership. At this point, we are only going to take what the market gives us. There is no need to over analyze or guess. Stay with winners.
KBIO is a perfect example as to why you cutting your losses quickly even in the day trading game is crucial. Those who were not quick to cut their losses were run over. Many were looking to short this stock and now are nursing major wounds. It also highlights the necessity to have proper position sizes and exits regardless of direction. Shorts were burned badly on this one. Learn from their mistakes.
The market could care less if you were long or short. A trader with a proper plan may only win 50 – 60% of the time, but with proper money management practice can be MASSIVELY successful over time. This is not a get rich quickly scheme. It takes dedication and discipline to win at this game. We can help.
