Earnings Season is Upon Us as Presidential Election inches Closer
Kicking off the week with solid gains the QQQs rose more than 3% on Monday. NASDAQ volume jumped above Friday’s level. A good sign large Institutions were active in NASDAQ names. The S&P 500 rose more than 1% closing the day at 1.64%. Volume on the NYSE was lower than Friday’s level, but we did see a nice day of gains. As we see earnings roll in it will be interesting to see how the market reacts. During earnings season the Presidential Election will throw a monkey wrench into things as well. We aren’t in the business of predicting elections. All we can do is work our process to put us in the best position to grow our account size. No matter what the street is generating for noise we must remain poised and disciplined with our approach. Risk Management is paramount and should not be ignored ever especially in these uncertain times. At this point, the stock market is poised to continue its current trend higher.
Are we predicting this market to explode higher? No, we are simply in an uptrend and no matter your opinion on this market or economy we are in an uptrend. This could very well end tomorrow, but we are not going to trade scared. Our Risk Management rules will help protect our downside in the even this market turns lower. While reducing our downside exposure is rule number one, we cannot not miss out on the opportunity for big gains. If we were to miss out on a big move it will greatly impact our ability to grow our account. Keeping losses small and letting winners run is nothing new, but it is one of the hardest concepts for traders to grasp. Trading scared is not an effective strategy and why we stress a solid plan of attack. Many will try and trade off their opinion but will ultimately fail. We want you to succeed and why we continue to stress these key points.
AMZN had a big day yesterday as the stock gained nearly 5% on big turnover. It is nice to see this big name get support off its 50-day moving average. CRM is another stock holding up its prior earnings release gap. ZM continues to be a monster stock. Given its rise over the last year it is well-out over its skis. Tread carefully. AAPL is another large stock with support at its 50-day moving average. We can include FB and GOOGL on the list as well. A good sign large NASDAQ stocks continue to see support at key moving averages. Keep a close eye on these names as they will be a clue where this market is headed.
We hope you have a great week of trading. This market is in a liquidity driven environment and anything can happen. Stay focused and disciplined.
