The slow push to get back above the high of the day last Wednesday continued today as volume slid lower on the session. Whether or not this is purely short covering remains to be seen, but we continue to remain in our current uptrend. GOOGL hit a new all-time high, but couldn’t finish on its high of the day and volume was light. Are we simply buying time to see an extreme blow-off run? Or is it we are just churning up here to only see the market head lower. We are not going to try and guess what might happen, but we do have enough stocks remaining with positive price action we definitely can see this market push higher.
One thing to keep in a mind a move back thru last Wednesday low will be a signal this market is weak. Right now, the NASDAQ recaptured its 10 day and is in a stone’s throw of hitting a new all-time high. It would be nice for this market to continue to hit all-time highs. The long side of the market is much more fun in terms of gains. The downside we can only get 100%, while we theoretically have unlimited upside. The choice is pretty easy when you think in terms of potential gains. That is not to say shorting doesn’t have a place in your trading it is just not going to be as lucrative as the long side.
The dollar is trying to regain its footing after getting hit as the Euro and Pound gain strength. Most would have you believe it is Trump and with good reason all we care about is the trend. The dollar is in a down trend with continued lower highs and lower lows. Until this is broken we expect to see the dollar continuing to push lower. Keep an eye on commodities as a weak dollar will help inflate commodity prices. Now with Crude back with a $51handle will it finally be able to stay above $50?
From an economic stand point Markit’s US PMI readings were mixed. Manufacturing looked to be lower than expected while services beat expectations. New Home sales fell in April by 11.4%. That is a big time miss as New Home sales were only expected to fall by 1.8%. Not the number all those realtors want to see. Given another rate hike is coming the 14th of June it will be interesting to see how mortgage applications fare as well as new and existing home sales.
We hope your trading week is going well. Good luck.
