August starts off mixed in a light volume affair. NASDAQ 100 was the leading index of the day helping push the NASDAQ composite up 43bps. Trading definitely felt a bit lackluster with the NASDAQ pushing higher. Crude oil continues its fall and broke $40 a barrel. We can blame it on supply concerns or something else. All that matters is the current trend. The market does have a toppy feel to it, but we don’t have any real evidence we are going to roll over. This simply could be a small pullback before a move higher. Regardless, we continue to get new longs popping up in our scans. Stick with the current trend.
The negative for this market is seasonality. August, September, and October are historically bad for stocks. It is not a given we are going to see a big pullback, but there is a good chance we may see something a bit more sinister than we have right now. Obviously we will see more new longs fail and stops triggered. Distribution will pick up, but in all honesty we are more concerned over how our positions do rather than whether or not we have a ton of distribution days. Stick with the process and when evidence piles up we act accordingly.
Most will try to overtrade this market by overthinking. We continue to see the NASDAQ 100 move higher on what seems to be on vapor volume. The volume excuse is certainly one been used often from market pundits. Since 2009 volume simply has not mattered! Sure, individual stocks to a certain extent. Overall, volume simply has not mattered to this market. We are not in what most would call a normal market. To survive, we adapt and continue to push forward.
Not that greatest start to the month and week we have seen. Let’s see how this week wraps up. Enjoy this week’s trading.
