While the market awaits a follow – through day we continue to enjoy superb gains. Small cap stocks led today followed by the Dow Jones Industrial average. Volume was up across the board and was above average. A very good sign regarding the health of this stock market rally. Holding back the NASDAQ was AAPL even after it announced two new iPhone models and iOS7. Despite AAPL the NASDAQ was able to hit new highs on above average volume. We continue to operate on the long side was we are getting plenty of signals to get long stocks. Follow the trend.
Calling market tops is a favorite past time of many market pundits. Although it does appear the crowd is somewhat diminishing they continue to be wrong in their assessment of the market. We simply avoid having to come up with an investment thesis to tackle this market. We simply have our system and allow price to guide us. It isn’t rocket science despite what you hear on CNBC and twittersphere. Stick with Big Wave Trading.
For the sixth straight day the S&P 500 and NASDAQ have closed with gains and while this is great news we’ll likely see some sort of consolidation. A day or two of consolidation would be good for this market by giving it time to digest this move properly. The McClellan Oscillator, while not perfect is in the extreme overbought zone. If we can move sideways for a few days to cool off the market it would certainly set us up to run higher. We wouldn’t trade off this, but it is worth noting we could use a breather prior to resuming the uptrend.
We can only trade on the knowledge we have today and remain in the “now.” No one can predict the future or “know” what it’ll be like. We’ll remain on the long side as long as our process keeps us long. There isn’t a crystal ball or Holy Grail, but there is Trend Following and Big Wave Trading.
Stick with Big Wave Trading and ride your winners.
