Coming off a long weekend stocks opened mixed and ended mixed. There was no question volume was lower, giving the S&P 500 a solid day of consolidation. The NASDAQ was helped along by NFLX, AAPL, and GOOG. NFLX announced it was expanding its service to Latin America and the market cheared that decision. Technology lead the way with the Russell 2000 not far behind. It will be important over the next few days to see the market consolidate and power higher. Today was a good day for the overall market. More importantly we need to see continued strength from leaders to keep this market going higher.
Our summer rally is upon us and the market is poised to continue higher, perhaps taking out previous highs. The breakdown we saw in May and June has not phased the market here. Rebounding from the 200 day moving average, volume has been lagging, but price gains have been solid. If you were bearish and short you have been burned. I can not blame anyone for sitting on the sidelines waiting for this market to prove itself. It is one thing to have the wrong opinion, but it is complete and uttter stupidity to be on the wrong side of the market. Staying wrong will only live your account dwindling in value and unable to recoup your stake.
There was decent price action amongst leadership stocks. However, majority of this move has been done on light volume. Unfortunately, even if we can surpass the previous high it is highly unlikely we will be able to sustain the high. We need volume in leaders to be confident in a sustain move. Not too mention we are going to head into second quarter earnings and the dog days of summer. Be prudent and always cut your losses.
