From the Trading Desk

You Can’t Keep a Good Market Down

After falling more than 100 points during the early morning session the Dow could shrug off sellers and finish in positive territory for the day. Volume crept higher across the board. Technically, the NASDAQ notched a day of distribution. However, given the support it is tough to really call it one. There is too much strength in this market. Even Utilities and Real Estate are getting in on the action. I am sure permabears will find something wrong with this market, but its actions have shown us nothing but bullishness. Action remains strong and we will continue to operate on the long side of the market. There is no need to over complicate this market by any stretch. Keep it simple and execute.

NAAIM exposure index came way down these past two weeks, but funny enough there are no bearish bets in the index. Hard to believe, but it looks like active managers are simply using cash to hedge rather than taking on risk of being short. I can’t say I blame them for not wanting to short, but not being more exposed to the long side when the market hasn’t given an indication its about to crack wide open to the downside is puzzling. AAII survey still shows an elevated level of bulls and bears below 30%. However, neither are at extremes.

Overnight the senate paved the way for tax cuts. Futures liked the news and have futures indicating a higher open. Not a real surprise as tax cuts isn’t as a hot button issue than healthcare. Nonetheless, even with the mess the healthcare fight was the market simply ignored it and moved on. Focus on what matters.

Other than saying it is all systems go for the long side there isn’t much else to say for now. We have taken advantage of this market. We are not fighting this market trend. You shouldn’t either.

We hope you have a great weekend. Enjoy Friday’s trading.

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