From the Trading Desk

Rally Continues as Jobs Report Comes into Focus

Another solid day of gains on Thursday as the NASDAQ 100 led all the major market averages with nearly a 1% gain. Small caps lagged behind the broader market, but the group has had a gigantic run as of late. We are certainly in overbought territory and given the extent of a rally a pause would be good for the market. Leading sectors in the S&P 500 yesterday were information technology and financials. Financials continue their run higher after the Fed hinted at another rate hike by the end of the year. Odds no pin the next rate hike in December. The US Dollar index continues to come off its most recent lows in September. Not a bad session by any stretch of the imagination.

It is time for some sort of pause. We have come a long away and a little bit of consolidation would do this market a lot of good. We love the gains we have had, but we want this to be a sustainable run. This market continues to shake off weak seasonality as it continues to show strength. A little give back here on lighter volume would be fantastic. We will manage our exits/stops as they hit. We will not just sell because we think the market may turn lower. Who knows, we could very well explode higher. Do not count out this market. Given where we have come and the price action there is no reason to think we can’t just keep going higher.

Sentiment isn’t overly bullish. The crowd is likely trying to pick a top here and will flip to bearish in no time. One would deduce, but who knows given this market how anyone will react. It is why we only pay attention to price action. There isn’t a way to accurately predict how humans and algos will react to anything. Stay patient.

We hope you have a great weekend!

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