The Federal Reserve finally hikes rate since December of last year, but surprises market by indicating the reserve bank sees 3 rate hikes instead of 2. It was a quite volatile afternoon with stocks closing lower near session lows. Volume was mixed on the session. NYSE volume was higher while the NASDAQ exchange was lower on the day. The reaction of the market was not favorable, but given our overbought conditions a little pullback is not going destroy this uptrend. However, what we want to avoid is heavy distribution. Tomorrow’s session will be interesting to see if selling gains traction or we find support. Stick with the plan.
One thing we would like to avoid is selling accelerating to the downside especially if volume kicks up. We want to avoid distribution piling up. The way uptrends end is with distribution stacking up over a few weeks. For now, we remain near highs and we are going to put on some hedges to protect our gains. We also have our stops in place to avoid losses compounding themselves. The last thing we want to do is give up much of our gains. We work hard for these gains and want to keep them.
From an intraday perspective, the long side of trades may be a bit difficult over the next few trading sessions. Nothing is certain, but majority of stocks will follow the general market. Given sentiment and overbought conditions we will likely have a tough time to push back into all-time highs. If the overall market can find support and not continue to sell-off, we will likely see favorable conditions for long intraday trades. It is a wait and see game. However, we will post a watch list every morning where we see some opportunities. Of course, our chat room will always spot opportunities intraday. Stick with Big Wave Trading.
Let’s hope we this market can finish on a high note here. Best of luck with your trading!
