From the Trading Desk

Large Cap Tech Selling Continues

The first half hour of trading sellers dominated the market as large cap technology stocks were once again facing unrelenting selling. It appeared we were going to have another day where the NASDAQ was down big with FB, AAPL, AMZN, NFLX, and GOOGL were leading to the downside. We are now entering the summer trading months where lackluster trading often is the result. Caution is certainly warranted, but what that means is you adjust your risk accordingly. Most will panic sell and as we have seen with this market it leads only to disappointment. Perhaps the good news today was volume happened to come in lower on both exchanges. NASDAQ volume was down 18% while NYSE volume was down just less than one percent. Today’s low now becomes important and it is something we’ll keep an eye on.

We have quite a bit of work tonight as there are plenty of stocks needing their stops adjusted. Where we will go from here is anyone’s guess. If we hold today’s low and avoid further distribution this market can hang tough. One hiccup will be Wednesday’s press release of the Federal Reserve’s latest open market committee. Odds are they hike rates by a quarter point. The market at this point is expected the Fed to raise rates. If not Wednesday it is highly likely July’s meeting will see the central bank raise rates. Price action is everything and we’ll continue to react to how the market moves rather than our opinion of what will happen. This is an important piece to our trading process. Do not override the system because of your opinion. Stick with the trend.

The big NASDAQ stocks are being rotated out of. AAPL was down more than 3% on the session and through its 50-day moving average. This does not mean we are going to go into a correction or a crash. Sure, we might and it would be helpful to setup some powerful chart patterns. We can wish, but we must keep an open mind and react to what price is doing.

We wish you well this week. Stay focused and follow price.

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