Led by the QQQs the market gains evaporate
For those who were around for the morning session saw stocks push higher. This morning’s gap higher did not come as a surprise. We have seen this same story with majority of the market gains since the COVID-19 lows. Were you surprised at the mornings gap higher? Nothing surprises us here given the stock market since 2009. The Federal Reserve has been an enormous factor since the Great Recession. Pumping trillions of dollars back into the economy pushed this market to where it is today. As we pushed to the session highs this market began to stall out. Sellers quickly began to gain momentum but picked up steam and by 2pm it was clear sellers would push this market back down. Today could certainly be the point at which we see this market roll-over. This could also be a blip on the way higher. No one knows and one day does not make a market.
TSLA went on a roller coaster ride. Beginning the day gapping higher and gaining nearly 14% erased all its gains. The stock has been on a tear since the lows seen from COVID-19. Regardless of the reason for the pop and drop we must take notice. Please take notice as this is precisely the reason, we do not chase stocks higher. For those buying at the highs today now find themselves well behind the 8-ball. TSLA may find support, but for today it is the poster child for the action seen during the trading session. Other notable stocks in the red: AMZN and NFLX.
It is interesting see this market unfold since the beginning part of the Spring. This pandemic has been tragic. When we view this from the lens of the market what emerges is all the opportunity, we were able to take advantage of. While many debated the validity of the market the focus was all on price action. While still a devastating event and one we are still moving through the market produced some fabulous winners. AMZN, ZM, and NFLX are just a few. Let us continue to keep an open mind and follow where this market wants to take us rather than getting sucked into our own opinions. Emotions are dangerous in this game and those who master their emotions come out on top.
We have plenty more trading left this week. Keep grinding.
