From the Trading Desk

Central Bank Hikes Rates; Stocks hit more All-Time Highs

As expected the Federal Reserve Bank of the United States of America raised its benchmark rate another quarter point. Volume on the exchanges were mixed with volume on the NYSE was slightly lower as the NASDAQ saw volume inch higher. The Dow continues its monster run, but despite the rate hike financials were lower. S&P 500 Financials sector was down 1.27% on the session. Certainly the case of: buy the rumor sell the news for the group. Given the Fed expects more rate hikes next year the group as a whole should continue to produce. Time and price will tell. Small Caps led the entire market with gains yesterday, but the group is not sitting at all-time highs. We will see what Thursday’s market action brings to us. Trade only what is in front of you and not what you think should be there.

AAII Bulls are back once again hitting 45% on the week. No real surprise as this market simply shakes off any sight of selling pressure. II bulls are high too nearing an extreme. AAII Bears sit at 28% which is not at an extreme, but given the bullishness it is something to take note of. Active Managers on the week curbed their equity exposure and bearish bets have shown up. This is an interesting take from the group given the II and AAII survey bullishness. In the end, we are governed by price and price only. If we are to continue higher we will follow along. Otherwise, our exits are in place to protect us from any downside risk.

Steady as she goes in this market. NFLX from a weekly perspective looks solid and certainly has the potential to produce a pocket pivot. For the most part the FANG stocks are acting well. There are some cracks forming, but like we have seen before they are quickly erased. Time and price will tell and it is up to us to act properly.

Stay focused and disciplined. Have a great day trading Thursday!

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