Traders coming off a long holiday weekend were greeted with a slew of economic data as well as a positive open. Not much negativity from this morning’s economic releases to speak of, unless of course you dig into the numbers and find something to complain about. The market certainly did not react as if anything was too negative. Volume jumped higher than Friday’s level and while it was lower than average it was strong enough to tip the scales for the NASDAQ and Russell 2000. Lagging on the session were the Dow Jones Industrial Average and S&P 500. We are not surprised despite the S&P 500 being at all-time highs, but these two indexes have been holding up while the NASDAQ and Russell have been beaten up. We aren’t about to complain, but we’ll adjust as price dictates. A good start to the week and we’ll look for this strength to continue.
All we can do is operate on what we know right now and not what may or may not happen. Tomorrow, we could certainly reverse lower in tremendous volume killing all the recent gains. Perhaps, this market just catapults higher confirming today’s move. If we add to today’s gains in expanded trade it would certainly be a tremendous win for the bulls. There is absolutely zero chance we are about to guess what is going to happen next. What we will do is follow our trading process and execute our plan. Second guessing your trading process will only confuse you and lead to your portfolio returns down the drain. We do not want to see that.
The sectors leading the S&P 500 were Technology, Financials, and Utilities. Once again, our leading sector for the year continues to find buyers. Technology and Financials are a nice signal there is risk coming back into the market. We can also see the risk play out in the Russell 2000 index. VIX remains subdued as investors do not see much volatility over the next few months. They may very well be right and for now our volatility ratio continues to drop and is a good sign for this market rally. We’ll continue to push forward with our strategy and procure as many gains as possible.
We hope you enjoyed the long holiday weekend by getting out and having some fun. We’ll see you back again here tomorrow.
