After Friday’s rally following the news Trumpcare would not see a vote did not carry over to the opening of futures Sunday night. While the losses weren’t spectacular they were quite large compared to what we have seen from this market lately. Futures continued to inch lower throughout the morning and continued for the first few minutes of trading. Buyers were not going to be denied and overwhelmed sellers. NYSE volume was up while NASDAQ volume was down on the session. We continue to see the market fight off sellers and continue to maintain in their uptrend. For much of the month we have seen the major indexes work off the gains we saw in January and February. This is healthy behavior and we have yet to see distribution pile up. We do not know what tomorrow will bring and while we are not completely out of the woods yet there are some positives hinting we may have upside left.
This uptrend is still on somewhat unstable ground. Today’s action was certainly a positive and one we needed if this market is to hit new highs soon. A sell-off on heavy volume and plunging below the 50-day moving average would not have been a positive for this market. Finding support at the key moving average is something we want to see from a healthy market. We will certainly need to see further support and a few more stocks breakout from healthy patterns before we lift out of this uptrend from being under pressure.
The last week of March it is hard to believe we are already one quarter deep into 2017. Time flies when you are making gains. The recent consolidation has helped us raise some cash to push into the new crop of winners when they emerge. We constantly cut our laggards and move into emerging leaders. There is no reason to hold onto a stock that cannot move in the direction we are expecting. Our strategy is to get after monster stocks and ride them if they are in an uptrend. Of course, we have a sound exit strategy and position sizes to minimize risk while maximizing return. This process continues to work quite well and will continue to do so if we execute according to plan.
We hope you have a great week. So far, it is shaping up like another great week for Big Wave Trading.
