The noise of the day was whether Trump’s healthcare law had enough votes to pass. Stocks did not like hearing there were not enough votes and closed lower. Volume was lower too. Real Estate was the biggest winner of the day as the sector was up more than 70bps. Energy was the biggest loser and continues to struggle. Tomorrow will be an interesting day if the market decides to hang every move on whether a vote happens or not. We are still in a precarious position with the market. Therefore, we will continue to tighten up stops where they need to be tightened and add to our hedges as signals trigger. Stay disciplined.
Over the last 5 days only two sectors are in positive territory: Real Estate and Utilities. The worse of the bunch is Financials, but that is no surprise given Tuesday’s action. Regional banks appear to be toast as many have had a tough time and now their charts are in shambles. It will take time to repair all the damage. It is time to move on and find other opportunities.
Bulls finally jumped on the AAII just in time for Tuesday’s big drop. This week Bulls ended the week at 35% with Bears falling 8% to 30%. Sentiment has been split between AAII versus the II and NAAIM measures. NAAIM Exposure index dropped to 69% as active managers cut their long exposure. Not a surprise active managers cut their long exposure after what happened Tuesday. Will AAII follow suit next week?
It is going to be a fun Friday regardless if we get a vote or not. Have a great weekend!
