Another bad day for IWM as it fell more than 1 percent in heavy volume. Traders and Investors alike are selling down their exposure to Small Cap stocks. QQQ and SPY held up relatively well and continue to consolidate their recent gains. Volume on the exchanges fell, but that comes off Friday’s option expiry level. The Dow Jones Industrial Average was able to sneak out a small gain. Outside of Small Caps the market does not look half bad. Perhaps, the group is signaling something about the upcoming G20 Summit. We are in the summer months and we do know summer months can be a difficult time for the stock market. Best to be sure our risk is in check and we execute our trading plan with flawless precision.
All eyes and focus will be on whether the US and China come to a trade agreement. A high stakes poker game. Each has its own agenda and believes they have the upper hand in the negotiation. How long can each side hang on with current tariffs in place? Questions we do not know the answer to nor will we attempt at answering them. We care about how the market acts and finding winning stocks. Sure, there is impact from the summit. However, we will see it baked into the price action of the market. Many believe they need to know how the market will react to an event to make money, but this is not true. Do not fall into the trap the market tries to get you in. It is all noise. Focus on what really matters.
It would be nice to get some positive action from IWM over the next few days while QQQ and SPY continue to consolidate. We doubt this will happen, but it would do the group a lot of good to see buyers pile in with heavy volume. This market is anything but what we would like it to be. Therefore, we must focus on what is working and not what we want. The market’s job is to fool as many traders as it can regardless of who you are. It is not personal, just the business.
We wish you the best of luck to your trading on Tuesday. There is opportunities all around us and for those ready are able to take advantage.
