A solid session for the Russell 2000 and NASDAQ coming off last week’s lackluster performance. Volume was mixed as volume on the NYSE ended higher. We did see the NASDAQ bounce off its 50-day moving average, but we did not see big institutions pile into technology stocks. The S&P 500 continues to act well holding onto its 10-day moving average. After Friday’s job report showing modest job growth all eyes are focused on whether the Federal Reserve will raise rates or not. A good start to the week and we’ll continue operate on the long side of the market if we continue to see positive action from the market.
We continue to see an elevated number of bulls in the market. AAII Bulls ended last week at 44% dropping 6 percentage points. Bears did move higher by 3 points to 25%. We have no seen bulls remain in command for quite some time. Even after the lows in February we never saw bulls hold such a dominant position. It is interesting how the tables have turned. If we push back into extreme territory look for the market to stall.
Last year December was a very tough month for stocks. We say many traders see their yearly gains go out the window with the fall in prices after the Federal Reserve moving rates up 25bps. It is very likely they will do the same next week. The question will be if the market will react the same way? It is anyone’s guess, but for now we are in an uptrend and all we can trade is what is in front of us not what may or may not happen. Stick with the trend.
A good start to the week, but it would be nice to see this market continue to push higher. Best of luck to your trading!
