From the Trading Desk

Dow Finishes Higher as NASDAQ notches a Day of Distribution

Wednesday’s action was not the greatest, but the good news once again buyers were able to come in at the lows and push the market higher. Volume was higher across the board. Thus, NASDAQ Composite finished down .61% notching a day of distribution. The Dow was able to escape with gains as the index was able to pull itself out of an outside reversal day. We can’t say enough regarding the resiliency of this market. There are still some traders trying to top tick the market when they really could have been taking advantage of the uptrend. The last time we had any resemblance of a pause was back in August. This market hasn’t looked back since. It pays to stick with the prevailing trend. There is nothing new in the market, but many are still ignoring the basics every great trader knows. We will continue to operate under this uptrend and until such time signals dictate.

A quick note on sentiment as we see the AAII survey came well off its bullish stance from last week. Most of those who responded bullish last week ended in the Neutral camp. A few moved to the bears, but not in overwhelming numbers. Bulls finished the week at 45.5% down 8.7%. Neutral respondents jumped 6% to 30.5% while bears inched higher by 2.6% to 24%. Remember, rounding error will interfere with the summation of percentages. Moving to the II Survey we see a complete and utter lack of bears. Current reading is 12.8% with a 5 year low of 12.7%. Investment advisors simply are not bearish. Those who are bullish make up 64.7% nearing a high of 66.7%. The spread is at an all-time high. Interesting as we see earnings continuing to roll out most are bullish here.

Where we go from here is anyone’s best guess. Will we ever get a correction? Perhaps we will in time, but no one knows the answer for sure. At this point, we wouldn’t put anything past this market. We could very well simply take off here and never look back. This market has proven it can shake off any news or event and push higher. It is prudent to have a plan and move forward without trying to top tick this market.

Have a great Thursday!

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