New Anti-trust investigations into the countries largest tech companies have rattled the NASDAQ 100 and Composite indexes. Both are dominated by the largest technology companies in the US and it is no wonder both were hurt when AMZN, GOOGL, and AAPL fell during Monday’s session. Whether or not anything comes of this situation but coming on the back of all the new tariffs sellers took the opportunity to really hammer these stocks. QQQs at one point appeared as if it were going to plunge right through March’s low. The ETF was able to find buyers late and was able to close above that low. We are in a precarious position here as many of the indexes are well oversold. The QQQs are approaching levels not seen since December. While the downside may seem an obvious play snap back rallies can break the backs of short sellers. Exercise caution and remain true to your trading process as the future is unknown.
TLT continues its march higher as investors are jumping into Bonds as a flight to safety. Even XLU enjoyed some love yesterday finishing the day higher by 1%. The search for yield certainly isn’t in the bond market with the 10 year at 2.10%. Crazy to think many were thinking bond yields were going much higher back in the fall of 2018. Unfortunately, as the Fed as proven in the past is, they always overshoot with rate hikes. We would expect, especially if the headlines continue to roll out like they have been to see a rate cut soon. Does this mean stocks will go higher or lower? No one knows what the future will bring us, but it should provide a tailwind. Whether or not stocks have any sails to catch the wind will remain to be seen. In the meantime, we’ll continue to grind.
There are always intraday opportunities in the market too. While not as abundant there are always opportunities to add to your portfolio gains. Keep in mind we are heading into the summer trading season. More recently, we have seen summer sessions treat bulls well. Historically speaking, summer has not been as kind as the recent past has shown. Always knowing your open risk and where the exits are vital to your success. Of course, position sizing is just as important too. Many traders simply fail to maintain a high level of discipline needed to succeed in the stock market.
This week got off to a funky start with QQQ falling further and IWM closing in the green. What is in store for the rest of the week no one knows. We wish you the best of luck with your trading Tuesday’s session.
