From the Trading Desk

NASDAQ Snaps Back; Russell 2000 Leads

Despite volume coming in lower than Tuesday’s level the market was able to see a sizeable rally. It was nice to see the NASDAQ find support at its 50-day and ultimately close back above its 10-day moving average. We will need to continue to avoid distribution, but for now we have stabilized. Financials were the biggest benefactor of today’s rally followed by information technology stocks. Utilities were the worst performing group finishing down nearly 1% on the session. The Russell 2000 finished higher by 1.55% today leading all the major indexes. We like to see the group push higher as it is a sign of investors willing to take on risk. However, we are still in neutral mode as the index has yet to break out from its recent trading range. Today was a far cry from what we witnessed yesterday. Obey the plan and watch your stocks.

Looking back at old market commentary we used to touch on briefly economic reports. Today for example would have been mortgage applications, pending home sales, etc. However, the market has cared less about anything other than Jobs and even then the market has ignored the numbers and proceeded higher. The reason to point this out is we are not here to have a cocktail party conversation. Sure, knowing the most recent jobs number or jobless claims figure would serve you well at a party. Unfortunately, it will not help you in the stock market. Focus on leading stocks and cutting your losses. Everything else is meaningless.

Tomorrow now becomes much more interesting. Do we simply continue to build upon today’s gains or does the stock market back-and-fill. Bulls will want to see these gains built upon. Any heavy volume selling will impress the bears or who is left? What will get those who are neutral off the sideline? Great questions and we will simply wait and find out. We’ll react according to what the market wants to do.

We hope you are enjoying the whipsaw action. We continue to chop around these levels after the June 9th sell-off. Distribution is creeping higher, but we are holding our June lows as well as the 50-day moving average. Keep areas to watch. Good luck to your trading Thursday.

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