A relatively quiet day on the street in terms of volatility, but stock couldn’t muster the necessary buyers to end in positive territory. Small cap stocks performed the worse as sellers hit the group hard. The Russell 2000 closed below its 50 day moving average. Volume was higher across the board with volume in the S&P 500 names jumped 18% over Friday’s level. Energy was today’s worse laggard while telecom services took first place. Not a great way to start a holiday shortened week, but we did hold up relatively well with the volume we saw today. There are still some positives in this market, but not enough negatives to tip the scales. Keep your risk management in check by obeying stops and proper position sizes.
The VIX continues to remain near its multi-decade lows while the market continues to fend off any resemblance of selling. This market has the potential to continue marching on this path where we see very little resistance. We have a lack of distribution and a breakdown of leadership. Sure, we have stocks that lag. However, we are not seeing a lot of leadership buckle under any sort of pressure. They continue to hold up. Unfortunately, small caps are the exception and are struggling to hold up. All the attention is on the NASDAQ 100. The only index that was positive on the day. Pretty amazing to see the flood of buying in NDX names. Flight to safety is a strong emotion. NDX is now the new blue chip stock index.
Hard not to mention AMZN hitting $1,000 today. One of the most mis-understood company by the old time Wall Street. AMZN has had an astronomical P/E and many value players have missed the entire up trend because the stock was “over-valued.” Pretty amazing when you think about it and why it highlights we obey price and price only. No need to have a mental exercise to figure out what is a over-valued or not. All we know is AMZN is an uptrend and it is likely to continue. Look at all the retailers filing for bankruptcy! AMZN is destroying the old brick and mortar retail shops. Adapt or die.
Not a good way to start the week. It could have been worse. We wish you the very best this week!
