After yesterday’s heavy volume sell-off stocks make a charge higher following the lead of the NASDAQ. Preliminary volume indicates NYSE volume on the light side while higher on the NASDAQ exchange. Volume is getting a boost from AVGO and BRCM as talks regarding a merger are intensifying. SOXL broke out into a new high today in large part due to AVGO and BRCM news. The Dow Jones Industrial average lagged behind the NASDAQ, Russell 2000, and S&P 500. It is clear the NASDAQ is the winning index here as it tries to set a new closing high this year. One day does not make a trend and today’s action proves this. Yesterday did look bad yet we did not see any follow-through selling to the downside. The chop continues as this market continues to grind higher.
There is still quite a bit of bubble talk going on with regards to technology. We are not in the bubble blowing or popping business. Our sole goal is to follow the trend as long as we can much like the perfect wave. No one can predict when bubbles will occur or how long they will last. Sure, there are a lot of private companies receiving massive valuations. Does this automatically mean we are in a bubble? Look at AMZN and its price-to-earnings multiple. While it is HIGH the stock continues to plug higher and not implode. Like we pointed out in yesterday’s commentary the Shanghai and Shenzhen are on tremendous runs. Are they both in a bubble? Well, going over past parabolic runs they are likely in one, but for now why jump off until you have a signal the trend has ended? Not cutting losses and missing out on gains are two big reasons investors fail. Avoid these mistakes at all costs.
While we had a few sells last night we did not have a ton of them and it is likely the case for tonight. We are still long and will remain that way given this run in the market. Are you still on the sidelines confused as to your next step? Too worried about the hype online and in business news? Big Wave Trading is for you. Get off the sidelines and get in the game and become successful. Go here and use coupon code SELLINMAY to get 30% off our subscription rates. Do not hesitate and miss out on the chance of a great deal. Your trading capital will thank you later. Go now!
This market continues to chop up those continuing to try very hard to catch a market turn. It is a lottery ticket. Big upside, but very low probability of success and it is why you should stop this minute trying to pick a top. At Big Wave Trading we are interested in growing our accounts and not trying to become the guru CNBC trots out on their programming. Our focus is price and everything else is simply noise. Stick with proper risk management and cutting your losses. You will be a success story.
