Markets reverse course and close at the highs of the session despite an unexpected fall in consumer confidence. Early morning selling gave way to buyers just a few minutes after the market open. NYSE vol ran higher, but the NASDAQ’s was unable to catch up and surpass Monday’s levels. Institutions were on the NYSE side of the market today with Oil and Gas names leading the way. Financial stocks lagged weighing down the S&P 500, but Technology stocks with the lack of volume lead the NASDAQ higher. Small caps finish a shade under the NASDAQ, but an overall decent day in the market. Price action certainly indicates this market wants higher, but the lack of volume hints at the strength of the rise may be tepid.
AAPL stock was able to hold its 50 day moving average, a key level for institutions. Volume rose on the day, but remained under the 50 day volume average. We have seen AAPL stock pull this stunt before and would not be surprised to see the stock do it again. Whatever for the reason, fundamental or not this stock remains resistant to heavy selling after the crisis in Japan.
There are plenty of stocks breaking out and we are going to take advantage of them. It goes to show if you had negative opinions of the market they are worthless. The best way to take advantage of the market is to jump on these stocks whom are moving rather than fight this trend. No one knows where the market is going with 100% certainty. Managing your losses as small as possible will allow you to take advantage of price movements like we have today.
Tomorrow we’ll get a read on the job market with the release of Challenger Job Cuts as well as the ADP Employment figure. Much will be debated over the numbers and what the “mean,” but as always we’ll take how the market reacts to the figures rather than guess. We want the probabilities in our favor rather than fighting against the trend. Successful stock market trading depends on managing your losses as minimal as possible and riding your winning stocks (Charlie Sheen #winning).
Stay classy and cut your losses.
