After more than 18 weeks since low stocks stall for the past two.
We are in an interesting market given the retail crowd’s bearish stance and the professional crowd as bullish (as measured by NAAIM). Regardless of what others think of this market the past two weeks we have seen the NASDAQ stall out. Is anyone really surprised to see this market take a pause after a massive run up from COVID-19 lows? Earnings continue to pour in and a few big releases this week like AAPL should provide the market with some fireworks. In the end, how we measure our success is through our account. We cannot worry about things that may or may never happen. Focusing in on the now with a sound risk management process will keep us in the game long enough to produce returns. In return a sound a risk management process will take us out of the game early enough to avoid real pain. As we transition into August next week, we will be staring at a seasonally week period for stocks from a historical perspective. Stay nimble and cut losses.
AAPL reports earnings this week after Thursday’s stock market close. Friday the stock received a bit of support at its 50-day moving average. The stock did a great job maintaining its 10-day for 2 months. For such a large stock it was a nice run. GOOGL reports the same day after the market close. The stock has had some trouble with its high as of late and has been a bit more volatile than AAPL. These two do make up quite a bit of the NASDAQ 100 and Composite. Friday should be an interesting session depending on how the market reacts to earnings.
Sentiment continues to be an interesting character. The NAAIM exposure index is near 100 indicating Active Managers have piled into the stock market. On the flip side the retail crowd as measured by the AAII remains bearish. Even after such a strong run up the retail crowd still believes the stock market will be lower in 6 months. Regardless of what they may think our focus is on the price action of our stocks and the stock market. Our opinions aren’t worth the weight of a grain of salt in the stock market. Price action is everything and we will focus on what matters.
The last week of July is here. Time to make the most out of the week.
