From the Trading Desk

Market likes Trump’s Speech; Banks Love it

Financials were the biggest benefactor of Trump’s speech today with the group up nearly 3%. Utilities were the biggest loser down nearly 1% on the session. Energy, Industrials, and Materials were all up “bigly” on the session. Volume was up across the board as traders pushed stocks further into nose bleed territory. Bonds sold off as the market is gearing up for another rate hike from the Federal Reserve during this month’s open market committee meeting. The market is certainly pricing in another 25-basis point hike. We will certainly find out soon enough. We will continue to monitor our exits and entry signals. There is no sign this market is letting up just yet, but we must be prepared for whatever this market can and will throw at us.

This market is quite unbelievable as we continue to see strength even when we are in overbought territory. An interesting development was in the VIX today where we saw the fear index finish the day at its high of the day and even above the open. This will be something to watch over the next few trading days and how the market reacts will be very interesting to watch. This is not us calling a market top here. It could very well be nothing and we continue to push higher. Could mean we have yet to see capitulation to the upside too. The most important job for us is to protect our capital and we will do this with our position sizes and exits.

Something that has been going on in Twitterland is the debate over if this is a bull market from 2009, 2011, or a BRAND new one starting July of ’16. Some are even calling it a new super cycle. The reason it matters to these people is beyond us and we are not about to jump into the game of calling this a new bull market from 20XX. So, what if you call it a new super cycle? Are you taking advantage of the opportunities in front of us or are you just here to make “calls?” We are not big on wasting our time with meaningless discussions. Neither should you.

We continue to have a great year with this market continuing to push higher and higher. There is no telling when this will end now. All we can do is focus on our process and execute.

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