Another day and blue chips stocks continue to plow forward. BA was a big part in the move today for the Dow as the stock was up nearly 80bps. While the Dow was up it failed to set a new all-time high. BAC was up more than 3% after earnings. Banks continue to act well through earnings season. On the downside NFLX missed its mark and sellers slammed the stock during the after-hours session. In typical Monday fashion volume was light across the board. Are we in overbought territory, yes. Could we go higher, yes. Until we have signals to sell in order to protect our capital it is steady as she goes. Regardless of our opinion or anyone else’s we have to follow our process. Stick with the trend.
As earnings season continues to roll in you have to be aware of earnings. NFLX earnings was after the bell and if you had taken it long in the morning you are well under water. If you have a big cushion and you can sleep at night, there is no reason to bail on the stock. Earnings season can destroy gains and your capital if you are not careful enough. Know when your holdings report and plan accordingly.
We continue to get new long signals. This is a sign of a market that wants to continue to push higher. If we have a ton of sell signals as well as a draught in long signals it would definitely be a sign of trouble ahead. The good news is we do have long signals. This can all change in a few days, but for now we are not going to bail just because we “think” the market is going to stall. Now, if you are a very short-term trader this may change how you trade.
A positive start to the week is not something we are going to complain about. Have a great week!
