Positive news from the housing market hit the wires premarket, but would not help keep the major market indexes in positive territory. While the gains in housing starts were nice the market simply did not move higher on the news. Bond yields crept higher as TLT narrowly hangs onto its 50 day moving average. Biotech once again weighed on the healthcare sector. As a sector, the group lost 1.52% with biotech down more than 2.4%. The pain continues in many biotech names. Volume was mixed with the NASDAQ volume creeping higher, but NYSE volume fell session over session. Our nice charts are nowhere to be found and it does give us some pause about the viability of this market. Stick with the game plan by controlling your risk through position size and exits. It is how you will survive and eventually thrive in the stock market.
We have come a long way from the panic of 8/24, but we haven’t seen the damage repaired from the selling. Sure, we have stocks bouncing off the lows. In 2011, we didn’t immediately have nice patterns when the market bottomed in October. However, by November there were patterns emerging and we had plenty of opportunities. Aside from stocks moving on news of contracts or investors like WTW and ERII there isn’t much to get excited about from this market. Controlling risk is vital as it will preserve your capital for the next move higher. Do not miss an opportunity because you have a lack of capital at your disposal.
YHOO and CMG missed earnings after the bell and both stocks are struggling. On the flip side ISRG is moving higher on its earnings even with a horrible looking chart. SBNY is looking to build a right side of a base with volume. OZRK pushed higher after shaking out weak longs last week. We certainly need MORE from this market to really have conviction behind this recent move. Patience will be rewarded in the long run. It is best to remain patient until proper signals are triggered. Do not rush for the sake of rushing. Keep the odds in your favor.
Stay patient and control your risk.
