Monday’s trading session began with big gap at the open. Buyers were unable to hang onto the gains and sellers would remain in control for the rest of the session. Volume was mixed on the exchanges with NYSE volume coming in higher and NASDAQ volume lower. The action on Monday wasn’t great and will be something to keep an eye one. We do want this market to consolidate and do so with lighter than average volume. There is a good chance we see this market struggle to continue moving higher. As always, we will make sure we have our stops in place and our position sizes on point. Wherever this market wants to go we will be ready.
Headline risks remain and with another North Korean summit coming up it wouldn’t be surprising to see the market react one way or another. Tweet risk from Trump will always remain as no one can predict what or when a Tweet will merge impacting the market. We can’t be worried with what might happen if headline comes across the news wires. It is paramount we continue to remain disciplined with our risk management process. Our number one job is to protect our capital above all else. Your ability to cut your losses quickly is high correlated to how successful you are in this market.
One thing we haven’t done in some time has offered a deal on Big Wave Trading subscriptions. We do offer a two-week trial but be on the look out for an upcoming savings if you are not a subscriber already!
Odds are in favor this market begins its consolidation. Monday’s action certainly gives us some pause. Small caps finished lower on the session too lagging the other major indexes. While it could be a one-day wonder like we have seen in the past, but we need to be prepared if we do see this market fall 3-5%. We do not know where the market will go from here. It is anyone’s best guess. Do not fall into the trap of thinking you know where the market will go. Remember, in December we saw people withdraw more out of equity funds than we did in 2008.
We hope you have a tremendous week of trading. There is always potential to extract gains from this market as we have seen since the December lows. Remove bias from your trading add a robust risk management process and you will succeed. Good luck!
