The Dow and S&P 500 notch a day of distribution on Thursday as volume swelled across the board. Small Cap stocks led the market lower while the NASDAQ was able to escape distribution. This market is knocking at all-time highs a day of distribution should not be a cause for panic. Where concern should creep in is if distribution begins to cluster together and leading stocks fall hard. At this moment, we do not have a clustering of distribution days. Earnings season continues to roll on and as we move into November will taper off. Steady as she goes here as we begin the month of November.
End-of-the-month volume did help push the Dow and S&P 500 into a day of distribution. We typically see institutions make portfolio reallocations and while it would have been nice to close the day without a distribution day. Friday’s trade should be much lighter. Continue to focus in on the price action of your holdings have a solid plan of attack. No matter what the market does here we want to be prepared for any downside risk while capturing as many gains as we can.
AAII survey did not show a jump in the number of bulls you would expect when the market hits all-time highs. Just 34% of respondents were bullish falling 1.6 percentage points on the week. Most responded as Neutral with 37.6% of the vote. Bears pretty much stayed the same at 28.4%. NAAIM showed a big uptick in active equity managers exposure, but not near 100%. At 88% equity managers who are active have pushed back into the market. The amateur investor simply does not trust this market. Our opinion on the market does not matter. We simply want to be on the right side of the trend!
We hope you have a great weekend. For those who are in Daylight Savings Time will turn the clocks back Sunday morning. Use the extra hour to study up on the market and game plan for next week. Good luck with your trading on Friday!
