From the Trading Desk

Traders Welcomed back with Low Turnover and New Highs

Once again, the Dow sets another record high for the 9th straight day closing higher for the 10th day in a row. While gains are not tremendous we continue to see the index act well despite the negativity surrounding the market. The QQQs finished higher by 63bps despite volume coming in much lower than we have seen over the last few months. SPY too as it hangs just below its all-time high. Volatility measured by average true range hit a new low for the SPY as we continue to see a tight trading market. Overall, volume was light across both the NYSE and NASDAQ exchanges. Semi-Conductors had a solid day with SMH up 1.76% thanks in large part to NVDA’s move on the session up 3%. Not much to argue here other than for argument’s sake. We have our stops in place and will continue to ride this market.

Over the weekend there were a ton of bearish slanting articles. We are certainly getting the vibe market pundits are fighting over one another to be “right.” What they are using as ammunition is how overvalued the market is. Valuations can get out of hand, but that doesn’t mean the situation cannot get much worse. We could very well see the price-to-earnings ratios expand much further than we do today. When your 10-year yield is under 2.3% there is not an alternative to produce gains other than stocks. Price will dictate how we operate, but until we see other conditions we are going to expect this long-term trend to continue.

NVDA reports earnings on the 10th of August after the bell. If you have been long from the May break out you have done well and have the cushion to remain in the stock. If you are in the stock as of Monday then you may want to think about getting out ahead of earnings. There is no way you know how the stock will move one way or another. Do not try and be a hero with this stock or any stock for that matter. You will only get burned in the long run. We see it quite often with traders who get “lucky” only to see them blow up their account later. Guessing ahead of earnings is no winning strategy.

We hope you have a great week of trading!

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