Another round of tariffs were slapped on Chinese goods Monday night had traders sending stocks lower. Volume was up on the day in the NASDAQ indicating institutional selling. NYSE saw volume lower on the session despite the Dow leading major indexes lower for the day. Crude oil had its worse day in recent memory sending the energy sector lower by 2.15%. The commodity held onto $70 a barrel and its 50-day moving average. Crude is certainly something to keep an eye on as summer progresses. Articles regarding the impending bear market continue to crop up. Sure, it has been quite some time since we have had a 20% correction. It does not mean one is right around the corner. Following a sound risk management process and our stocks we will avoid any issues with a bear market. Stick with price and Big Wave Trading.
AAII Bulls are back above 40% for the week ending at 43.05%. Bears inched just below 30% at 29.15%. Even with all the tariff and bear market talk Bears are plowing through. It would not be a surprise if this market sloshes around like water in a tank when shaken. At this stage in the game we are simply monitoring our new and add signals alongside our stops (exits). Position sizing will be on point to account for where we are in this market. Whether or not this lasts a few weeks or months, or even years we will be properly positioned to maximizing profits and minimizing our risk. Many have a hard time doing so and it is why so many fail at trading stocks.
Remember, we have earnings reports hitting the market soon. It is best to know when your stocks report earnings as well as any new trades. Big banks like JPM report this week with JP Morgan reporting Friday morning. We will see how a flattening yield curve has impacted their earnings. No one has the slightest clue how earnings will go for these large banks. Given XLF just experienced a death cross more downward movement wouldn’t be a surprise to us. The yield curve continues to flatten, but has yet to invert. An inversion would be an interesting development. Odds are in late September we will see another hike. How yields react will be interesting. We suggest the yield curve is something to keep an eye on.
We hope you are having a great week and hope you close out the week strong.
