From the Trading Desk

November Closes with Huge Move by the Dow; Tax Cuts Eyed

Powered by financials the Dow moved more than 300 points on Thursday. The blue chip, price-weighted index hit another all-time high. Hopes of a tax cut helped fuel the move along with higher yields as Bond Yields moved higher. The next Federal Reserve meeting is in less than two weeks where the Central Bank is likely to hike rates another quarter basis point. Volume was higher thanks to end-of-the-month rebalancing. Small caps lagged after posting big gains this week. What a solid move from this market on Thursday as this uptrend continues to kick butt and take names. We continue to see positive action and any selling continues to be well contained. Our exits are in place to protect our downside and we’ll see what Friday’s trading will bring.

The Trump Tax cut is set to cut taxes for a lot of businesses and individuals. We are not going to get into whether or not it’s a wise idea. All we are considered with is how the market reacts day in and day out. Sure, we could have a policy debate on the viability of this tax plan or the current plan or whatever. The bottom line is our job is to protect our capital and maximizing our profit potential. Leave the policy debate to the cocktail parties. There is no need to have the policy debate white wash your stock trading. Stay focused on what truly matters.

Sentiment has come back to the normal side of things. AAII Bulls are at 36% while Bears are at 32%. No real surprise there. The slightest hint of selling and the entire world becomes bearish. It is likely why we continue to move higher. Everyone wants to pick a top and be “smart.” We just want gains and how to get them is a quite simple formula. Unfortunately, human nature works against the many and leaves them in the dust. Clear the dust and come join Big Wave Trading. We’ll get you on the right path to bigger gains while controlling your downside risk.

We hope everyone goes out and has a tremendous weekend. A solid week for gains and we will continue to manage our trade signals as they come.

Good luck to your Friday trading!

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