Monday’s trading session began with buyers coming back into the market soaking up supply and pushing prices higher. Without warning, as 11am EST hit sellers regained control sending stocks lower. While we will not use hyperbole to describe the drop it was certainly out of character for the market. The good news was we were able to recover most of what was lost during mini-panic part of Monday’s trading session. Volume was lower across the board due to Friday’s option expiry however it was nice to see IWM lead the session with its volume above average. QQQs look like they could use a short consolidation period and SPX looks to keep chugging along. It would not be a surprise to see this market see some selling heading into next week’s quarter end. A friendly reminder to make sure your exit strategy is in place and you obey it. As far as the eye can see this market is poised to continue to push higher regardless if we do see some period of consolidation heading into the end of March.
QQQ and IWM have been on two very different paths as of late. Traders and investors alike have pushed into large cap tech. Even after a small consolidation period QQQs have powered higher. The ETF sits less than 10points lower than the high set on October 1st last year. On the other hand we have IWM who hit its high on the last day of August 2018. It too has come off its lows nicely, but is a bit further away from its all-time high. We could argue the consolidation period IWM has undergone the past few weeks is a much healthier than what we have seen with the QQQs. Time will tell, but both ETFs are looking solid heading into the final trading days of the first quarter. Hard to believe the first quarter is almost over with as time is flying by. We have had some nice gains and will continue to extract as much as we can from this market.
We are still seeing plenty of stocks setting up in bases waiting to break out. This non-stop march higher is quite impressive and it is nice to see the market still producing decent buy points. We would be concerned if we saw very few stocks in proper bases and of course our holdings showing significant weakness. In addition, distribution hitting the overall market hard would be a huge red flag. However, at this point all signs are pointing for this market to continue pushing higher. We are not about to argue with the market as we will always lose! Stick to the plan and continue to plug and chug away!
We hope you have a great week of trading!
