Volume was much lower than during Tuesday session as stocks look to consolidate gains after following through last Friday. Two to three-day consolidation periods are healthy for the market and since we have avoided distribution it appears this rally may have some life. Distribution immediately following a follow-through all but kills the rally attempt. In this case, we have avoided distribution and look for this rally to continue higher. We have been quite long this market and it has served us well. Our hedges were in place along with exits in case this market went south. Our focus continues to be on our risk management process and ultimately price. Anything else is simply a distraction to our trading and unnecessary.
Is the market sniffing out a trade deal with China? Or does it care? Fed going to cut interest rates this upcoming meeting? These are all questions those who want to impress at a cocktail party want answers to. We have no clue what the market is trying to tell us. What we do care about is that at this moment it is indicating it wants higher prices. When you boil it down who really cares about the why? So, you can feel important? All we care about is growing our account through sound risk management and following price (the ultimate indicator). If we concerned ourselves with such silly questions, we would be taking our eye off the ball. Stay on course.
There are a bunch of stocks continuing to act well. TNDM is still a stock poised to breakout and MDB is still acting quite well. These two names we have mentioned in this commentary have been performing well. ETSY is another looking solid having a solid session. If you are willing to put in the work, you can find stocks acting well and moving higher. It is our job to manage our portfolio in accordance to keeping our risk low and riding our winners.
Big Wave Trading strives to be the best resource for your trading anywhere. We have been around since 2007 and survived then thrived even when most thought the US economy was going to collapse. Why? We have a solid process in the place and manage our risk. It is no secret formula, but we remain steadfast in our approach. Benefit from our approach!
We hope you have a great day of trading. There is opportunity all around us.
