A tough day for the NASDAQ 100 as FB falls in heavy trade. Combined with the price decline and uptick in volume the NASDAQ notched a day of distribution. Volume on the NYSE was lower for Tuesday’s trading session. FB declined nearly 4% after news regarding states taking legal action against the company. Earnings continue to pour in and highlights the need to know when your holdings or potential trade targets report. There is no need to take on extra risk in this market. We are not in a perfect bull market. Its as if we are suck in purgatory for the time being. As we proceed deeper into the fall season and earnings season perhaps, we’ll firm up and move higher. Now, we are proceeding with caution and executing our trading plan.
We have yet to see many perfect trade set ups. This market simply has not given us much to get behind now. We would love to be long and strong a handful of names. Unfortunately, we just are not in an environment to do so. Small cap stocks still can’t get out of their own way. Yes, IWM snuck out small gains yesterday. However, the group is well-behind the rest of the market. QQQs suffered a solid day of distribution. Any continuation of selling would certainly be a big warning sign. Traders must be grounded and obey price regardless of the news headlines. Our focus will continue to be on our open risk and price action. There is no need to over complicate our trading in any environment especially this one.
We hope you have been able to extract some gains from this market we are experiencing this week. Control your risks and do not be a hero. Good luck to your trading Wednesday!
