Stocks Enjoy Boost from PFE Vaccine News
A huge push from PFE to kick off the week as their vaccine trial data proved to be effective against SARS-COV-2. The initial bump from the news wore thin on the NASDAQ while Small Cap Stocks and the Dow were able to hold onto the initial gap. Traders and investors were quick to dump NASDAQ listed names as a vaccine points to the end of the world’s current normal. Widespread distribution would not be achieved for some time, but the market is always forward looking. MRNA is set to release its vaccine data from phase 3 trials shortly. As the number of cases continue to rise the focus on ending this pandemic is a welcome sign for the stock market. Our job remains the same regardless of what news is produced: follow price action and control our risk.
The pandemic stocks: AMZN, NFLX, and ZM have not fared well as traders and investors alike are signaling the new normal will not be as kind to these stocks. We could be seeing a buying opportunity or the beginning of something a bit more sinister. If we knew what was going to take place our batting average would be 100%. Be weary of anyone claiming they know the future. Far too often these so called “gurus” scam people out of money. Spend any time on financial news sites you will see advertisements from experts who have made “x%” or some other astronomical amount of money. Selling the dream is what these people are after. Selling to the gambler who thinks this is a get rich scheme. This game isn’t for those who want quick satisfaction. Trading requires dedication and the detachment from your emotions.
A huge move in the number of bulls within the AAII Survey. Bulls ended the week at 55.84! We have not seen this survey show a number this high in a very long time. Bears dropped to 24% on the week. Given the move on Monday and post presidential election this big jump in the number of bulls is not surprising. It does give us some pause as a high level of bullishness typically isn’t a good thing for the market in the long-term. We must be mindful of our exit strategy and the size of our positions. Carrying too much open risk may lead us to losses hampering our ability to continue to reach new highs in our portfolio. We do not want to get into a situation where losses are piling up too high.
We hope you have been able to see gains over the past few trading sessions. Continue to trade with a high level of discipline and focus. No need to give up solid gains. Keep grinding.
