From the Trading Desk

Small Caps Lead Gains; NASDAQ 100 Slumps

It is Thanksgiving week here in the US and historically speaking is a good week for gains. Volume was lighter on Monday, but gains were made in the Russell 2000 and Dow Jones Industrial Average. We had our normal news flow, but calls for a market top are now coming from those who were calling for this market rally all along. Why start now? The likes of Jeremy Siegal want to be market gods and will do whatever it takes to appear right. We on the other hand just want to ride uptrends for as long as they exist. Our portfolio growth relies on our ability to execute proper trade signals and risk management. It does not rely on us trying to top tick ever market turn. This uptrend has been slow moving, but provided us with gains. No matter what type of uptrend we have all we care about in the end is executing our strategy. There are not enough signals to warrant us to get off this uptrend. As far as we can tell it is full steam ahead.

Typically, at market tops you have pundits fighting hand over fist to claim the stock market can go even higher. Now, we simply have pundits who want to catch the turn in the market to appear smart rather than focus on what truly matters. There is not much we can do other than to focus on what truly matters. Everything else is simply noise and we want no part of. Most will fall into the trap thinking they can outsmart and outplay this market. In the end, they will find themselves with a dwindled portfolio and bruised ego. Stick with Big Wave Trading and well get you through this market.

We expect trading to likely pick up during Tuesday’s action. Volume should pick up and then start to dwindle on Wednesday. Friday is a shortened session. However, with more and more automated trading systems it will be interesting to see if volume stays true to form or does it break its tendencies during the holiday week. Time will tell. Keep an eye on those FANG stocks. FB is staying nice and tight these days and has consolidated nicely along with AAPL. NFLX has pulled back to its 50-day in light volume too. There are also plenty of biotechs with sneaky tight price action. If you know what to look for there are plenty of stocks ready to go. It is a matter of proper position sizing and knowing your exits.

This market is quite healthy, and we will continue to take each day as they come. We hope you have a great week of trading and enjoy the Thanksgiving Day holiday.

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