From the Trading Desk

NASDAQ Squeaks out Gain; Dow and S&P 500 Lower

Aside from the extraordinary rise in the price of Bitcoin stocks continue to slosh around. Indexes are holding their respective 50-day moving averages which is a good sign. Volume is on track to end the week higher as the market stirs around these levels. The Yield Curve continues to flatten as bond investors push the 7s bond prices lower. An inverted yield curve would certainly signal to us the economy is about to hit a rough patch. After nearly 10 years of economic growth it would not surprise us to see some sort of economic contraction. Then again, this market is crazy enough to shake off an inverted yield curve. We’ll stick with the price action of the market. For now, we sit back and will execute our strategy with flawless precision.

Sentiment continues to remain very much like it has been for quite some time. Bears are slightly above 30% and Bulls in the mid-30s. The survey is supposed to represent sentiment from 6 months from the survey date. Most treat it as what the market will do tomorrow. It is becoming useless. NAAIM exposure has crept back to near 80% after hitting sub 50 at the middle of November. Clearly the crowd is moved by intraday moves whereas the NAAIM or institutions are not. Stay level headed and stick to the process. It will avoid unnecessary moves and potentially ruining your ability to make gains.

FB was able to regain its 50-day moving average, but NFLX is still hanging out below its 50-day moving average. AAPL is consolidating above its 50-day moving average and still is in relatively solid position to offer up a potential entry. Do not get us wrong, AAPL is a large stock and gains will be contained unlike smaller cap names where you might see it jump 20-30% in no time. Prior to 2008 we’d see the names some time double in a month if not more. Unfortunately, this market is not offering up these gains like it used to.

There is only so much we can do with what the market gives us. We wish you the best in your trading today!

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