For the second straight day sellers took to the market knocking stocks lower in fast trade. Wednesday’s market was able to see intraday support off the lows as the NASDAQ hit its 50 day moving average. The intraday rally did faed into the close, but stocks did find support at the lows. Volume ran higher on the day as the NASDAQ suffered its second heavy volume session in a row. Last night’s commentary indicated this market was in correction mode and today’s market action confirmed it. Despite the lift off the intraday lows, the market remains on shaky ground.
AAPL was able to find support at its 50 day moving average. The stock has been hit hard over rumors of Steve Jobs’ health, but the stock has been on a tear since the March 2009 lows. A bounce here in the stock would not come as a surprise, but we’ll need to see the stock work off the heavy volume selling before any meaningful move can happen in the stock.
Stock market trading isn’t for the weary, not is it for the over emotional human being. The past two days have been quite ugly and the temptation to call a top and go all in short is all too tempting. Decision making on gut feel is a recipe for disaster. We could see this market turn on a dime shake you out of your shorts only to collapse back lower. There is a proper way to buy and sell stocks, but none of which should be done by gut feel. Big Wave Trading helps teach those who want to be successful and not those who want to make “calls.”
Tomorrow the market will get a slew of economic data which will have market pundits crawling over each other trying to explain the possible movements of this market. The past few days have brought on selling and we are somewhat overdone in the very near term on the downside. Do not expect to see the market to continue lower like we saw in late 2008. Ignore the noise generated by stock market commentators and pay attention to what matters most: price and volumea action! Remember, always keep those losses short!
