From the Trading Desk

Market Adds to Gains; Albeit Small

Monday’s session saw stocks inch higher finishing off their lows after a shaky start to the day. We continue to see bullish action and although gains are minimal there is still buying power underneath. AMZN and NFLX helped the NASDAQ out with gains today as both stocks finished higher for the session. In a strange move Monday, utilities clocked in new highs on Monday as well. So much for higher rates eroding their viability as a yield producer. Financials bounced off their 50 day (XLF), but have struggled as of late. Is an inverted yield curve headed our way? Anything is possible with this market, but we will take a wait and see approach and let price dictate how we manage our portfolio. A solid start to the week and as we progress we will adapt with the market. There is no need to play hero in this market and our focus will remain on price.

In our chat we have talked about the economy (very briefly) where our signal is an inverted yield curve. On the VERY short end of the curve inverted a bit in August, but the long end of the curve while tightening never was close to inversion. An inverted yield curve would certainly be a signal to us the economy is running its course and likely to exhaust its run. What a run we have been on where we have not had a recession since 2008-09. It is unprecedented this run we have been on. Yes, economic gains have been weaker than past recoveries. However, this one has lasted a long time by historical standards. The Federal Reserve Bank certainly has had something to do with this pumping trillions into the economy, but for those who were not blinded by political motives have been able to take advantage of gains. Stop worrying about things that do not matter. Focus on sound money management principles and price!

It is hard to believe this is the last FULL week of trading for November. Next week is shortened due to the Thanksgiving holiday week. The following week December first is the Friday of that week. Time is flying by, but we are not letting our opportunity to make gains pass us by. While gains aren’t what they used to be we are not giving up the chance to make gains. Stay with Big Wave Trading as we continue to surf these waters and find opportunities for our subscribers. Everything else is just noise.

We wish you the best of luck with your trading this week. Keep grinding and your losses small!

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