A mixed day on Wall Street on Monday. Good to see Small Caps lead the market with gains, but with NYSE Volume higher the S&P 500 notched a distribution day. NASDAQ volume was lower on the session. Certainly, after the strikes on Saudi oil facilities the damage to the market could have been much worse. Supply from the facility could be disrupted for quite some time. Crude Oil prices closed back above $60 a barrel. Futures are indicating a lower open for Tuesday’s trading. We shall see how the market reacts as the FOMC begins their September meeting. We are ready for whatever the market wants to throw at us. Whether it is more gains or not our portfolios are in position given what this market has shown us. Stay the course and always maintain a high level of discipline given how this market has traded.
We are not 100% positive the market will react kindly to the FOMC rate announcement tomorrow. No one is ever really 100% either. Given the market action signs point to more gains. Certainly, seeing IWM sneak out gains when SPY and QQQ move lower is a good sign. However, it must maintain its leadership in order to continue to be positive. IWM has a lot of catching up to do. This market also must avoid further distribution. We simply cannot have distribution days piling up on us. Keep an eye on leaders too. They should be in your portfolio. Leaders always tell a good story and along with the market action should provide a clear enough picture. Price is the ultimate indicator.
News headlines over a US and China trade deal have died down. We expect this Saudi drone strike headline to remain for a bit to help fill the void. Towards the end of this month expect to see posturing from both the US and China with regards to talks. It is all a poker match. Besides, news outlets get paid for selling advertisements. How are they going to get your attention? We prefer to stay far away from the news cycle and let others worry about the noise. It does not help our trading nor will it yours. Keep away from it. The news is meant to be a distraction. Don’t let it become part of your process as it will toy with your ability to execute. Be vigilant and focus on what really matters.
We hope you have a great day on Tuesday. Stay focused and always cut those losses short.
