From the Trading Desk

Small Caps Suffer; Dow and S&P 500 Flat

A tale of separate tapes on Tuesday with Small Cap stocks suffering the worse and the NASDAQ notching a day of distribution. The Dow and S&P 500 essentially ended the day flat avoiding trouble. Not a great sign to see heavy selling in the Russell 2000 today. While not extreme the losses are somewhat concerning given the context of the overall market. We did see support at the 50-day moving average for the index, but certainly not the action you want to see from the index. The Dow continues its slow methodical crawl higher along with the S&P 500. There is no telling when we will ever see either index show any signs of weakness. We will continue to plug away at this market and whatever it wants to deal we’ll play accordingly.

Perhaps we’ll look back at this and say it was the “jumping the shark” moment for the market. You will be able to trade FANG futures on the Intercontinental Exchange (ICE). Sure, there are single stock futures and options. However, does this take the cake? It will be interesting if this product will produce enough interest to stay viable. We have futures on bitcoin why not on FANG? As long as there is price, we can always follow the trend.

Earnings season is winding down and it has been a pretty good quarter where stocks have beaten expectations. We guess you could argue expectations decline over the course of the quarter or make up some other argue why earnings were weak. The reaction to the earnings for the most part has been solid and what we care about most. Ignore the opinions of what the market is and start paying attention to facts: price. The argument about artificial buyers, valuations, or lack of volatility are not going to help you make money in the long term. Have a plan and include a plan to protect your downside in case you are wrong. Is it simple? Yes. However, many cannot implement. Do yourself and your account a favor and have a plan of attack and let others battle out over the insignificant.

Stay with Big Wave Trading and we’ll help you succeed. Best of luck to your trading today!

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