From the Trading Desk

Indexes Bifurcate; Stocks Lose Morning Gains

News over the weekend the Senate had passed their version of the tax bill sent stocks higher. Financials were big winners on the session. Higher rates and more money in customers’ pockets would certainly be a big win for the group. Volume was higher across the board and given the day’s action there is some extreme caution being thrown by recent price action. The NASDAQ is by far the worse looking index and distribution is piling up. The prudent move here is to validate you have proper position sizes and you must obey your exit signals. It is vital to your success and survival to cut your losses and in the case you have gains to lock in gains. Otherwise, you are looking for trouble.

The Dow continues to power higher as investors pour into large cap financials. On the downside, investors are selling off NASDAQ 100 names as FANG stocks are hitting a rocky patch. FB has joined NFLX with both stocks now below their 50-day moving average. Investors are just not willing to continue to support higher prices here and the NASDAQ is certainly on watch as we move forward. Biotechs had a real tough day on Monday as the group were rejected at the 50-day (IBB). Although holding the 200-day it looks very much in doubt.

Cryptocurrencies continue to act well from BTC, ETH, and LTC. There are other coins like Zcash and IOTA enjoying nice runs. Many are worried that digital assets are simply a fad and will eventually fade out. Remember, when the internet was just a fad? Keep a close eye on crytpos. 2018 may be the year of Cryptos and at Big Wave Trading we are going to take advantage of the opportunities crytpos are going to present.

We have a few hedges to make here as we have given them to our subscribers. If we are going to continue this type of trading we are going to protect our portfolio. Time will tell, but we are taking all the necessary actions given what the market is giving us. Good luck to your trading!

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