From the Trading Desk

Stocks Sneak Away with Gains after Fed Minutes

Wednesday’s session was a bit lackluster with the market unable to hold majority of the day’s gains. Volume was up across the board, but given where we ended it isn’t inspiring this attempt at a rally will be fruitful. GOOGL and AMZN appear to be rolling over even as GOOGL has formed an inverted head & shoulders pattern. A break lower here would lead to much lower prices. VIX closed with a 12-handle finishing the day up 2.3%, but its tracking ETFs all finished lower on the session. The biggest headlines were of course Trump and his councils disbanding. We are not into politics here at Big Wave Trading, but there are no words to describe the mess we see. Our concern is will it impact our stocks and our market. We do remain in a dead cat bounce. Our exit and position strategy is in place to protect our downside if the mess in DC invades the market. There are a lot of people who believe we are going to have a market crash. We will simply execute our strategy and avoid clouding our judgment with noise. Not a great market here, but we have seen worse. Keep grinding.

The dollar is rebounding this morning after sliding lower after the Federal Reserve minutes were released yesterday. We now have slight odds of a rate cut this fall! Yes, believe it or not Wednesday’s trading saw futures trading hinting at a possible rate cut. Albeit small, there is a chance the Fed will cut rates this fall. It is likely a fringe event an outlier in the realm of possibilities, but interesting nonetheless. We would likely have to see some event sending the equity markets into a tailspin. All we would like is some resemblance of a correction to setup nice buying opportunities heading into the year-end. Scary to think this year is more than half over and summer is coming to an end.

Buying opportunities now are becoming scarcer. There are two new longs for our subscribers this morning and while they are of high quality we just are not seeing an abundance of opportunity. Does this mean we are in for an imminent crash of the stock market? No, not by any stretch. Corrections happen and we fully expect a correction whether it be chop and slop or an old fashion 15-20% decline. The latter have been few and far between as of late. We can blame computerized trading or ETFs, but the fact remains we continue to be without a significant decline for a while now. Sure, Brexit vote sure did spook a lot of people and did set us up for a nice run. However, a more significant decline like 2011 would be welcomed. Buying opportunities could be incredible!

We hope you have a great trading day. Keep grinding and as always cut your losses. Small losses and big gains help you take your portfolio to another level!

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