After last Thursday and Friday’s action there was a hope the market would rebound and rally into the end of the week. Volume was not too impressive, but coming off of Friday’s elevated levels due to quadruple witching. What really made today’s rally was the last 30 minutes of the session where a flood of buyers came flying into the market. We are quite oversold and it is no surprise a light volume surge in equity prices occurred at the end of the session. There is not much to get overly excited about as very few stocks look ready to punch higher. We would love for this market to run higher. At the moment, caution is still warranted and maintaining discipline will serve all of us well.
The FANG stocks continue to hang onto their 50 day moving averages. At one point to FB appeared to lose its 50 day as the morning sellers really hit it hard. However, FB volume was well below average and continues to work itself sideways. The same can be said about AMZN, NFLX, and GOOGL. All these stocks continue to act well despite the broader market struggling. If there is a silver lining for this market it is these four horsemen.
There is no need to overcomplicate matters here. Keep it simple by smaller position sizes and tight cut losses. What you don’t want have happen is you to take on too much risk and this market goes against you. More to come as this market pushes towards the Christmas holiday.
