From the Trading Desk

Sell-off in Crude Sacks Energy; Stocks up as Turnover Picks Up

An expected build in inventories helped send Crude Oil lower by more than 5% as the S&P 500 Energy sector finished the day down 1.5%. Luckily, the group only makes up 6% of the entire S&P 500. Financials were the winning sector of the day as Banks helped push the entire group up more than 80 basis points. Volume on the stock exchanges were mixed, but the NASDAQ Composite index and the S&P 500 saw volume higher on the session. Many pundits were tied up with watching testimony to see if a headline regarding Trump interfering with an investigation would take down this market. Once again, taking your eye off what is important will only lead to heartache down the road. Focus on what matters, on what pays and its price.

Our recent new longs have had some trouble as of late. It is not a blaring warning signal, but a warning sign we may have some troubling waters ahead. We only care about our holdings. We are focused only on the leading stocks and this helps us have a great perspective on the direction of the market. If leading stocks begin to breakdown it is certainly a warning sign the market is headed for some sort of correction. This market has gone so long without a correction it is possible we see one soon. We are not going to sell off our longs and guess we are going to get it tomorrow. However, we’ll be vigilant with our stops and position sizes. If we do turn our stops will protect our capital and we can regroup. Whatever the market is going to do it will do. Nothing we do will change the market. Like the Warriors read and react offense, we simply react to what the market gives us.

We still have a lack of distribution in the market and leading stocks are okay. When warning signals continue to pile up with distribution in the S&P 500 and NASDAQ we’ll react accordingly. Keep grinding.

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