From the Trading Desk

Slow Crawl Continues; Volume Mixed

Tuesday’s session was confined to a tight trading range as volume on the NYSE inched higher and volume on the NASDAQ inched lower. All eye will be on the Federal Reserve statement at 2pm this afternoon. Small Cap stocks have battled back to their old highs, but the V-shaped rally leaves a lot to be desired. Financials have made a comeback too. Will the Federal Reserve statement help propel these stocks higher? Most stocks are holding up relatively well, but how much higher can we go? All we can do here is to continue to take our signals and manage our risk. No one can predict when the market will turn and how deep the turn will be. So far, we have been able to hang in there. Do not play hero ball with your portfolio. Risk management is paramount in this market environment.

What may work against this market later this week is the high number of bulls and seeing the indexes push into new highs only to stall out. We are still in a bad seasonal period and a little shake out as the 2nd quarter ends and 3rd quarter begins would not be at all a big surprise. It would be great if we would have a slight pullback and push higher. We are not going to try and force any correction because at this point any correction has been small. Do not try hard for a big market crash. On the flip side, do not think we are going to have a parabolic run either. It would be great to see stocks go up 500% or more in a short period of time like we saw in the 2000s. We just are not in that type of market environment. Things may change and can in an instant. For now, we have a low volatile environment where gains come slow and steady.

A few big boy stocks like AMZN and GOOGL are struggling a bit. FB is setting up for a run into earnings season it looks like and AAPL is resting after last week’s product launch. NFLX is trying to setup in a new base and volume looks to be in its favor. A handle here would be great into earnings season. There are a plethora of other stocks setting up in decent bases. A proper correction would be great, but we can only take what the market gives us. We cannot force trades and think we will be wealthy overnight. Too many traders believe this to be true. The get rich scheme has been going on for decades now and it won’t change. Once you realize this is not a sprint, but a marathon you will understand what it takes and know how important a risk management process is. Big Wave Trading is here to help!

We hope you have a great day of trading today and as always keep your losses small.

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