In a stunning turn of events yesterday buyers rushed into the market pushing it higher after opening lower after North Korea flew a missile over Japan on Monday late afternoon. Volume ended the day higher across the board in support of the day’s action. At the open, the losses were mounting and we could have very well seen sellers do some damage. However, it was not to be as the market was able to find its footing. Volume in the QQQ and SPY was not huge, but there was just enough to push it higher than Monday’s trade. All-in-all a very positive session, but we do remain in a precarious position with seasonality in play. The best course of action is to continue to maintain proper position sizing as well as containing our losses.
Financials were on a slippery slope yesterday opening below July and August lows. The group really hasn’t had much movement since the move we saw post-election through February of this year. Since then, we have not seen the group do much other than slop and chop. Banks thrive on higher rates as spreads become more attractive. Perhaps banks are foreshadowing a longer time-period between now and the next rate hike by the fed. Something to keep an eye on as we progress later into this year.
Commentary is going to be short this morning. There are plenty of reasons to be leaning towards the bulls’ camp with this market. We have had quite a few new longs since last week and it is a good sign we are getting signals. This market is still in a holding pattern. We are wrapping up the end of summer as well as stuck in a weak seasonal period. The worse thing we can do here is try and be a hero and go way out over our skis to make money. Stay disciplined.
