We continue to see the Dow Jones Industrial average struggle with looming trade fears hang over the market. In the meantime, we see Small and Micro Cap stocks blast higher into new all-time territory. Volume was lower across the board as institutions weren’t all that excited to be active in Wednesday trading session. The trend of volume sliding on positive market days continues. For much of the past few years and even going back to 2009 the overall market fails to find volume on positive days. So far, we continue to hit new highs regardless of volume. Something to continue to keep an eye on, but the focus should be on risk and price action. It is logical to think we are going to see this market have some sort of pullback and as long as you have proper risk management in place you can weather any storm. Keep with what is working and discard what is not.
It is very easy to get on a soap box and pound the table this market should be lower here. Whatever the reasoning, you will likely be on the wrong side of the market. Sure, there will be times where you are right, but for how long and will you be maximizing your profit potential? Ignore all the chatter and noise regarding the direction of the market. Most will get it wrong and many will miss the big plunge! Even worse, most will miss the long run up only to drain their account next to nothing. Do not be the one who loses out due to your opinions. Pay attention to what matters and remove the judgement out of your trading. You will be much better off from it.
Bulls have come down from the mid-40s last week in the AAII survey, but well off their January levels where Bulls reached over 60%. Given the Dow’s lack of support and trade fears it is no real surprise we do not have Bulls over 40%. Bears ticked higher week over week. It wouldn’t surprise us to see these continue to show a lack of extreme in any direction for the time being.
The continued strength in NFLX and AMZN are amazing to see. These two monster stocks will be studied for years to come. No matter what they were doing as far as earnings are concerned they just continue to find buyers. These two are certainly ones to keep an eye on for weakness. The other FANG stocks are holding up okay even FB battled back from dipping below its 200-day moving average. As summer trading approaches it would be wise to keep a finger on their pulse.
Have a great weekend!
