May kicked off with stocks pushing off morning lows to close near session highs. According to IBD’s website NYSE volume was flat, but NASDAQ volume slipped on the session. For the most part the day lacked any volume push until the end of the session. Given the NASDAQ’s losing streak AMZN did its best leading the way to higher prices. We must not forget the first day of the month for trading is often met with buyers as new money is put to work. The Dow and S&P 500 remain in their uptrends while the NASDAQ is trying to hang onto its 50 day moving average. So far, our uptrend is still hanging tough. Keep it simple.
It is clear the NASDAQ is the laggard of the major market indexes. DIA, SPY, and IWM are in clear uptrends while the QQQs are struggling a bit here. Since the beginning of the year the move away from QQQ names and into DIA and SPY cannot be more clear. IWM has fared better as of late, but was the forgotten child for much of the last year. Amazingly enough after the most recent rally we still have not been able to pierce last May’s high and set a new all-time high for the S&P 500. For all the volatility and hoopla we have not made much progress. Stick to price and let others figure out the why. Let them miss out on gains.
The real storm brewing is not so much in the stock market, but what is going on in currencies. The US Dollar continues to sink across many of the major currencies such as the Euro and Yen. The Yen continues to surge as the BOJ continues to not increase their QE program. Despite increasing their QE program back in March and lowering rates further ECB has not been able to stop the appreciation in the Euro. Is the storm brewing in the currency markets have any impact on the stock market here in the US? It is anyone’s guess. The clues will always be in price.
A good start to the week today. Earnings continue to push forward and it is always best to keep proper position sizes as to not get burned by an earnings report. Stick with the process.
