Monday’s session saw volume drop significantly against Friday’s levels. The Dow couldn’t manage to sneak out gains on the session while the NASDAQ ended the day higher. Small caps inched higher too, but gains were minimal. Summer time trading is certainly here with the lack of volume. Earnings season is in full swing, but with seasonality beginning to turn negative anything is possible with this market. Financials enjoyed a solid session with XLF gaining more than 1.3% on the session. A good sign for the market if we can continue to see positive price action from the group. Keep a close eye on where your exits are and obey them at all costs. Do not lose sight of your risk management regardless the type of market we are in. We do appear poised to push higher here but remains to be seen. Stick with Big Wave Trading as we navigate summer time trading.
A quick look at the FANG stocks we only see NFLX having a difficult time. After earnings the stock opened more than 50 points lower. It nearly closed the gapped during the session but has since fallen back towards earnings lows. FB and AAPL need to report earnings, but with GOOGL poised to push higher after reporting Monday night and MSFT holding strong after earnings the FANG stocks in decent shape. We could see a lot worse from these stocks. Perhaps it is a good sign for us heading into a weak seasonality period of the market. It is anyone’s best guess and why we have our exit strategy in case the market goes against our positions.
As we close out the last full week in July and head into August seasonality tailwinds will switch to headwinds. This does not mean we cannot move into higher ground. What it does mean is we need to be vigilant about our risk management process. We cannot stress it enough to all our subscribers and to those who read free commentary. To succeed you must cut losses. There is no other way around. If you let losses ride you will see your accounts dwindle. Do not make this mistake with your portfolio.
We hope you have a great last week of trading. Hard to believe July is almost over.
