Although volume was lower across the board today price action was quite nice. Normally, we’d like to see the market pullback on lighter volume. Today, it appeared we were going to get stocks to do just that. However, by the end of the day the market had moved off its lows. The US Dollar found support, but rolled over giving stocks the boost above the break-even level. While it would have been nice for stocks to finish just below the break even line we can take stocks notching gains. Days like today are healthy for the market by letting it digest the most recent moves and it was needed.
The market was in need of a break, a consolidation day. For much of the day it appeared our picture perfect consolidation day was about to occur. That was until the US Dollar was unable to hold gains, helping stocks move higher. Traders appear to be ultra sensitive to moves in the dollar and when the dollar broke lower traders moved into stocks. What is amazing is the noise coming from this intraday action and traders driving themselves crazy with the whipsaws of the day. BWT members can sit back and ignore the noise while many are getting whipsawed.
We still remain in an uptrend and this is all we need to know. Just about everything else is noise, even Meredith Whitney is noise. The stock market really could care less if Whitney or others are bulls or bears. It will move as it pleases with or without you. By sticking to the market leaders who are showing superior price and volume action will net you gains. By using this strategy you greatly increase your odds of becoming a successful trader.
Rather than doing a long post about the market, I will keep it short tonight. There isn’t anything “special” here other than stick to the leaders and your cut loss strategy. Upside takes care of itself and why it is important to make sure your downside is protected.
Go get ’em
