Today we will see the Russell family of indexes reconstitute. The Russell Rebalance event is a yearly even where all the Russell family of indexes rebalancing. We will see a massive amount of volume flood the markets at the end of the day as institutions adjust their portfolios. As far as Thursday’s market goes it was a positive to see Small Caps as measure by the Russell 2000 rebound reclaiming its 50-day and 200-day moving averages. Volume was solid for IWM for the day. QQQ and SPY had very quiet days as these two continue to digest their most recent gains along with DIA. Not a bad session and it was nice to see some love thrown at IWM for once.
Sentiment did not change week-over-week. AAII isn’t even worth mentioning how each Bull, Bear, or Neutral respondent changed. Neutral respondents are still plentiful while Bulls remained under 30%. The small investor certainly isn’t too impressed with this market right now. Even the mean exposure number for the NAAIM Active Manager survey inched lower. Many market participants are not too thrilled with the market. Can we blame them? Given all the headline risk anyone who trades on an emotional basis will be gun shy here. We can only trade with the market ahead of us and right now we are quite long this market. If this situation changes, we adjust. However, we do not want to miss out on potential upside because we fear this market. Stop trading in fear and hope. Trade with Big Wave Trading.
Two IPOs we are watching are certainly LYFT and UBER. These two-look ready to push higher. ADPT had a tremendous session and is something to watch over the next week or two. Perhaps it can form a continuation pattern and continue its march higher. On the big boy stock front GOOGL continues its struggles. AMZN looks PRIMEd to push higher ahead of its PRIME Day event. FB Is right behind AMZN as it too looks ready to push higher. Even with its Chief Design Officer moving on AAPL doesn’t look too bad here either. Makes you wonder why GOOGL is lagging. However, do not wonder too long as we only care about what is leading. There are plenty of stocks out there if you have the right process and willing to remain disciplined.
As we head into the weekend, we are going to continue to work our process. Maintaining our edge is simple enough to us but requires a ton of discipline. We hope you have a great weekend. Get out and enjoy it while you can.
