The early going was very rocky as sellers took to the market taking down equity prices prior to the 12:30pm EST policy statement and 2:15pm EST press conference. By 11:00am EST stocks hit the lows of the day and began to trend higher. Leadership took a hit prior to the statement as investors were timid after NFLX earnings hinting the market was going to sell-off. However, stocks began to push higher after the release of the statement and again at the end of the news conference. Growth stocks, leadership type stocks were able to turn around and end on a solid note. Today’s market action reaffirms the market rally and higher prices are on their way.
Earnings season has been a good one. We are seeing earnings continuing to beat expectations. Now we are seeing a few hiccups with NFLX and CMG, but these two stocks are still holding key moving averages. NFLX fundamental story is still there, they are the leader in their space. However, we need price and volume to confirm their story. These two stocks have their “story” intact, but if they roll over on volume it will spark a bigger downside. Given the recent action, it appears they’ll make another run at higher prices. Let price and volume confirm your view.
It is interesting to hear all the banter regarding the Fed and its policies. Continuing to print money with no end is certainly a recipe for disaster. However, could the Fed pull out its monetary easing? Sure, but who knows when they’ll stop their money printing scheme? Successful stock market trading does not rely on “opinion,” but on following the price and volume action. Discipline is paramount and this includes the ability to cut your losses short and letting your winners run. The hardest part of stock market trading is the ability to hold onto winners. Often, many will sell out of winners too quickly “locking in gains” and missing big moves. Learn how to hold and your results will improve tremendously.
We continue to get onto leaders and we are seeing more looking like they are about to breakout. Get on board.
Cut your losses short!