Once again stocks were able to extend their gains from Monday’s trading session and push higher for the 7th consecutive day. Accumulation has stepped into the market, but on Thursday the vigor wasn’t up to par with Wednesday’s level. For much of the day stocks spent time around the unchanged levels. It appeared the NASDAQ was going to eek out small gains and the S&P 500 was going to finish lower in slower trade. However, the market had other ideas sending the market to new highs by the end of the day closing just below the highs. Just another positive day on Wall Street.
Leaders showed up to the party taking the reigns and lead the charge throughout much of the day. Although, it would have been nice to see these leaders take control earlier in the week. We simply take what the market gives and run with it. The positive action being showcased by the leadership is quite positive as many of the individual stocks showed excellent price and volume performance. They are beginning to take the stand where they simply can not be ignored and are looking like they’ll continue to move higher.
The AAII released its sentiment indicator this week showing Bears were still well in control with a ready over 40%. Bulls were non-existent nearing 29%. The crowd remains quite bearish and given the move we’ve seen this week it would lend itself for these bears to exit the market with losses on the books. The market has simply shown us that it wants to move higher. In my post Monday I revealed how the market went back into uptrend mode via the NASDAQ positive price and volume action. Yet, many believe they are smarter than the market and continue to force trades and lose money. Listening to the market and what is conveying to you is how the most successful stock market operators win and WIN BIG in this game.
The best approach at this point is to not simply chase stocks higher. This is a very bad habit to get into because there are some leaders who do pull back to pivot points and buying extended will scare you out of a potential winner. Buying at pivot points will reduce your risk to potential leaders that might pull back to their pivot point and will shield you from getting shaken out. Remember, chasing is emotional buying and emotional buying AND selling can lead to many trading problems down the line. It is ultra important to maintain a level of composure and remove the emotional buying and selling to the amateurs (and some “pros” for that matter).
An index that has been slightly overlooked since this market began to rally is the SOX index. I have noticed many semiconductor stocks have been under tremendous accumulation as of late. Just today, the sheer number of semi-conductor stocks that I have arriving in my scans is something I simply can not ignore and withhold from this commentary. In the chart I am about to show you notice how the index is right at resistance. Normally, this may look like an opportunity to get short but the underlying stocks that make up this index are poised to move higher. Therefore, it leads me to believe this resistance line will turn into a support line after it breaks through.
Enjoy the Friday market as it is an options expiry Friday for the month of July. Normally, volume picks up on expiry but not always. It’ll be interesting to see if buying interest steps up on expiration Friday.
Best of luck, remain positive and enjoy your weekend!
Comments are closed.