A better than expected Consumer Confidence number certainly couldn’t save the market from the heavy volume selling today. Volume jumped more than 24% on the NYSE and 16% on the NASDAQ. Today’s move was quite vicious suggesting lower lows are in the market’s future. Crude oil jumped on the day as traders rushed into the commodity. Crude’s trend had been positive, but the news out of Syria gives fundamentalist an excuse to jump on the trend. Higher crude prices will not please consumers. It appears we’ll have to see this selling exhaust itself before we’ll get another attempt at a rally. Today’s move should remind you to always stay disciplined by following your system.
It appears we have the trifecta for the market to digest. Many will focus on the how the market will react to the debt-ceiling, the Fed taper, and Syria. Syria seems to be old news, but with rumors flying around the news scraping algorithms are having a field day. Trend following ignores all the opinions out there including “insightful” commentary. Stick with price by riding your winners and cutting your laggards you will, over the long-run win.
There isn’t a need to post a chart for IWM and SPY as you can simply look them up in charting software. However, both crucial ETFs are now below their respective 50 day moving averages. Not only are they below, but sliced through them like a warm knife through butter. Many will try to forecast where the market will head next, but it will be impossible for anyone to pin point an exact turnaround. How low will this selling takes us is anyone’s guess. Stay with your process and Big Wave Trading.
