Stocks avoided a distribution day across the board but volume did come in higher on the Nasdaq. Still the small losses prevented that index from registering a distribution day. The overall market was more than overdue for a pullback. Volume likely increased on the Nasdaq due to earnings and traders trying to game Janet Yellen’s testimony. It is unlikely we will get an orderly pull back with Friday’s job report looming. We continue to operate overall on the long side with the uptrend. Until we have evidence that a potential reversal in the works, low volume and non-distribution pullbacks will be welcomed.
There are a plenty of stocks looking solid and poised to push higher. Earnings season will continue and for plenty of stocks we are finding solid moves. Sure you get stocks like PZZA and FIT, but for the most part we have seen a solid earnings season. The QQQs are knocking on new highs and SPY is not too far behind. Unfortunately, we have yet to see IWM catch up. We cannot stress it enough to reject the urge to try and pick when this market will turn. Like we said after the last Fed meeting there were plenty of traders looking for an “island top.” There are still plenty of bears around. It is best to ignore the noise and focus on price.
The fun will begin Friday at 830am EST. Sure, tomorrow we’ll get a read on jobless claims and see where market sentiment has shifted. However, this will pale in comparison to the financial media’s hype and reaction to a single jobs report. We have ZERO clue what the number will be nor how the market will react. Even if you knew the report would show 150,000 jobs gained do you know how the market will react? Do not guess. Stick with the prevailing trend and right now it is an uptrend.
Steady as she goes. Position sizes and exits are crucial here. Adhere to your strategy.
