For the past seven out of eight days the NASDAQ has seen a positive close. Today, the S&P 500 would take over leading the market higher as volume across both the NYSE and NASDAQ fell from yesterday’s levels. Lagging once again was the Russell 2000. Whether or not this is a sign of things to come remains to be seen, but the leading index for the majority of this uptrend has been the NASDAQ 100. We will continue to follow this index as our leader and pay attention to price signals. The recent run has put us into overbought territory, but we know from past history these conditions may last much longer than you think. Stick to adhering to a sound process with a proven record of success.
Volume really has taken a back seat and has yet to matter all that much to this market. Price action will always dominate our process, but it is nice to have volume confirmation. Volume comes into play with individual names more so than the overall market. However, since ZIRP and QE have dominated our markets volume has not been an effective tool alongside price. Simply finding stocks with solid price action and moving higher regardless of volume has been the way to go. Finding leading stocks is something we strive to do at Big Wave Trading. Come join our community and find out what stocks are leading.
Tomorrow the market will find out what was talked about during the last Federal Reserve meeting. I can only imagine how exciting it must be to be in those meetings (sarcasm). I am not sure how many of us would be able to last through two days with Central Bankers. Given that these minutes tend to move the market one way or another. It is useless to try and guess, but we will wait for the dust to settle before we are able to get any signals from the session. Let other traders deal with the madness immediately after the release, while we wait and let our prey come to us.
The summer is ending quickly here and with less than two weeks left of summer trading it will be interesting to see how we close the summer out. In the meantime, make sure you get out and enjoy the last bits of summer because before you know it for many in the lower 48 winter will be here before you know it.
