A slew of economic data across the globe came in better than expected boosting stock prices around the globe. It began with China’s official (forget HSBC) PMI reading above 50 at 50.3. Yesterday’s end-of-day selling is a forgotten memory with the huge move in the market. Volume was actually lower on the day continuing the tradition this uptrend has is new highs on lighter volume. We mocked those calling a top in last night’s commentary and today is a perfect example of why it is foolish trying to call a top. Our uptrend remains and we continue to operate on the long side.
Sentiment still favors the bull side, but not in an extreme way. Best guess is many traders were worried about the Fed this week and moved into a neutral position. AAII saw the number of bulls drop to 35%, bears rise to 25% and neutral responders hitting 40%. NAAIM survey showed a median respondent of 74%. We still have not seen an extreme reading from sentiment. It has knocked on the door, just hasn’t walked through it.
Tomorrow we’ll wrap up the week with the Jobs report at 8:30 am ET. The market is looking for roughly 185,000 jobs and an unemployment rate of 7.5%. We have NO IDEA how the market will react to any number. If anyone can tell you with confidence have them repeat it every month for a few years and see how well they do. The market will move the way it wants to and trying to game the number will only leave you in the poor house. All predictions are worthless and guessing the employment report surprise to the upside with unemployment ticking higher is not going to get you the big gains. Get after price action and focus on a long-term trend following with Big Wave Trading.
Make sure you get out and enjoy the first weekend in August. There aren’t many summer weekend days left. Make the most of them. Cut your losses short and ride your winners!
