From the Trading Desk

Transportation Stocks Lead the Way; AAPL Pulls Down NASDAQ

The big story of the day was the Federal Reserve meeting. As expected the Fed will begin to wind down its balance sheet. Most likely at a snail’s pace, but will begin to wind it down. Transportation stocks got a boost as the group ended the day up 1.55%. S&P 500 inched out gains along with the Dow. AAPL had a tough go at it as it was down 1.68% on the day pull the NASDAQ into negative territory too. Volume was higher across the board as it typically happens on a Federal Reserve Day. The trend remains intact and we will continue to operate on the long side of the market.

AAPL is such a huge part of the NASDAQ and as it moves so will the NASDAQ. The positive for AAPL was it could hang onto the lows since the first of August. Closing below the 50-day moving average in heavier turnover is not a great sign. However, closing above the mid-point of the session removes the sting just a bit out of the session. GOOGL had a decent session, but remains stuck in a rut.

Small cap stocks continue to push higher. A textbook v-shaped rally. You cannot find a better example of what we mean by a v-shaped rally. These are hard to tackle, but as you can see the group of small cap stocks are almost up 10% from their August lows with very little rest. Now at its upper end it will be interesting how the group moves. IWM’s 14 day ATR is diving to new lows as volatility has been completely erased. Just look at the VIX diving below a 10 handle. It would not surprise us if the index challenge’s this Summer’s low. Have a plan in place to exit, but don’t hop off the bandwagon because you think something may happen. Do not leave gains on the table.

Interesting week so far and we continue to see the market fight off weak seasonality. We do see a few market pundits beginning to talk about year-end performance chase. It isn’t the first year we have heard this chatter. So far, we haven’t seen the year-end chase.

Have a great day of trading Thursday!

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