Out of the gate sellers took to the market slamming prices lower, but it wouldn’t last too long. Just before 10 am the market was able to find its footing and begin its march higher. Volume from the onset was tracking higher and it was attributed to the selling volume during the morning session. By the end of the session volume ran 14% lower on the NASDAQ and nearly 4% on the NYSE. While it would have been nice to see volume expand off the lows the strong price move is a positive. However, given where the NASDAQ stands with its distribution day count we simply cannot ignore it. There were some nice moves out of leading stocks to give this uptrend some hope of continuing higher. Where we go from here is anyone’s guess, but for now we have stabilized.
Economic data has been light as of late with very little released this week. However, as tomorrow is Thursday it will change with retail sales and jobless claims headlining economic news tomorrow. Will it change anything will remain to be seen. One thing is certain and that will be any dip in retail sales will be attributed to the very cold weather the majority of the lower 48 states has experienced in the month of February. Everyone’s attention will certainly slowly move towards next Wednesday’s Federal Reserve meeting. Yellen’s first meeting as Fed chair will be highly scrutinized. We don’t feel bad for her as the attention comes with the job description. Our focus will be our process and how we react to the price action.
Many here are certainly still calling for a market top. It will always be the case even when we do actually top. Calling market tops is a fool’s game and the majority of the money made by trend followers is simply following the price trend. The perma-bulls will lose just like they did in 2008-09 when the market goes against them in a bad way. Our process is to capture the upside and a bit of the downside. We will always remain ahead of the game.
Stick with it.
