From the Trading Desk

Hurricane Irma Fears Erased as Stocks Climb

Initial fears were Irma was going to completely devastate the state of Florida, but those fears were curbed when Irma’s track shifted avoiding a worse-case scenario. Volume was mixed with the NASDAQ seeing volume come in higher on the session. The Dow Jones Industrials led all market indexes higher with a 1.19% gain. Small caps ended the session up 1.1%. SPY closed at a new all-time high as volume on the ETF was higher than Friday. IWM is still trailing and has yet to take a leadership position. It certainly bares to watch over the next few weeks. Next week is another Federal Reserve meeting and it appears stocks want to rally into the meeting. This market continues to take on any news or situation shrugging it off. It has been resilient. The trend remains higher and we continue to stick with our current long exposure. Let’s see if this market can sustain a nice rally.

We are still in a seasonally weak period for the markets. Until we clear the latter half of October we will still have a headwind. This does not mean we cannot rally higher. It simply means the odds of a tailwind pushing us higher is not going to be big. We have conditions currently to continue a nice little rally for a week maybe more. We do not forecast. We do not predict. We trade what is in front of us and worry about what is in our control. Leave the noise for others who want to impress at a cocktail party. So many are bloviating about valuations and Trump and whatever else. Focus on price and your risk management process. Everything else is noise. Trade the market we have and not the one you want.

The devastation we have seen in Houston and now Florida is huge. It will be years before these places are back to 100%. There will be massive cleanup efforts and then the rebuild. All of this will take a lot of money. Regardless of your economic affiliation the reality of the situation is money will be spent to rebuild. Jobs will be created and it will certainly help in the near term. We hope they recover swiftly.

We have conditions for a positive market trend. We are long and continue to see gains. We wish you luck and a great week of trading.

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