Stocks stage intraday reversal to close just off the day’s high to notch a day of accumulation
Bulls recaptured the day as early morning selling gave way to late day buying pushing the market to close just below the highs of the day. A mixed housing picture from S&P/Case Shiller Home Price index left many traders worried about their positions as the market began to sell off. But, what kicked off further selling was a negative economic reports out of the Richmond Fed and Consumer Confidence board. The Richmond Fed manufacturing index showed reported a -2 reading while the market was expecting a gain of 6. In addition, consumer confidence reading was well below expectations coming in at 48.5 near February levels. Selling intensified, but was quickly met with buyers as volume swelled. By the end, the market notched a good day of gains with the Russell 2000 index leading the way.
It didn’t come as a surprise to see consumer confidence figures spur further selling. Bears and weak bulls have been trying to find excuses to exit positions and the worse than expected figure gave them the opportunity. Unfortunately, for anxious bears and worried bulls the market reversed its losses and turned them into gains. This happens often during very strong up trends. Patience must be exercised and you must stick to a strict selling discipline to remain with market leaders.
There were a few breakouts today as other leading stocks acting well today. During a course of an uptrend you will always find some stocks react in normal fashion and others tend to get a little wild. Stock Trading takes skill that is only mastered through experience and dedication. It will take years to become a professional at this game, take your time.
Market pundits will likely turn their attention to jobless claims and GDP figures set to be released on Thursday. We’ll likely here how important these figures are and how you should be prepared for them. Luckily, here at Big Wave Trading we are not influenced by opinions on economic figures. It is always the action of the market leaders and the market indexes guiding us and shaping our trading. Do not let the opinions of others influence your trading, let the market dictate how your portfolio is invested.
The market remains in a strong uptrend with plenty of stocks breaking out and running. We’ll remain invested as long as the status quo does not change and we do not see signs of a weakening market. Until then, we’ll enjoy the gains.
