A solid session from IWM on Thursday as the ETF rose 1.18%. DIA barely inched higher as volume eased up across both the NYSE and NASDAQ exchanges. Not a bad session for stocks overall. We still have headline risk despite some optimism on a phased trade deal approach. As earnings season ramps up, we will certainly get a feel for corporate earnings and any hints towards a pending recession. We would certainly expect to see companies to include the risk of recession in their quarterly earnings reports. More importantly, we will be focused in on how price reacts rather than guessing where it might go. This market is not going to make it easy on us and we must continue to stay disciplined.
There was a sizeable jump in the number of Bulls week-over-week in the AAII Sentiment Survey. Bulls ended the week at 33.6% up more than 13 percentage points from last week. Bears dropped 12.9 points to 31.1%. The announcement of the trade deal certainly pushed the crowd back to a bullish slant, but still majority of respondents are Neutral on the market. Neutral respondents ended the week at 35.3% down just slightly by .4 points. An interesting development in the NAAIM survey, active managers did not jump back into the market. The NAAIM exposure index average was 57.08 for the week. This was a slight decline from the week prior of 57.32. Perhaps the lack of oomph has come from active managers staying on the sidelines.
We remain in a range bound market and would love to see stocks break out to the upside in massive volume. Whether this comes to fruition or not remains to be seen. Stay focused and maintain proper control on your risk. We hope you have a great weekend and best of luck to your trading Friday.
