Big volume surged into the markets today as the markets ignore geopolitical actions. Pushing to all-time highs the S&P 500 wasn’t the biggest winner of the day. The Russell 2000 gained more than 2.75% the clear winner on the day. Coming in second was the NASDAQ with a gain of 1.75%. Not a bad day and precisely why we do not panic like many did at Monday’s lows. Today’s action certainly highlights the trend following strategy we employ. The noise produced by news outlets certainly has many distracted. Focus on price and have a process to take advantage of the market. No opinions! Our uptrend remains fully intact and we continue to see plenty of opportunities on the long side.
There wasn’t any meaningful economic data released this morning worthwhile to mention. Not that it would matter anyway and especially with the Federal Reserve pumping free liquidity to the markets. What trumps it all? Price and it continues to tell a story and we are listening. Many were seen on Monday panicking and selling pushing the market lower Monday. Even worse was selling during the 2pm EST plunge until buyers were able to regain control. The moral of the story is do not panic and follow Big Wave Trading.
One issue here is we have still not digested the plentiful gains we have over the last few weeks. We have overbought conditions, but that has not stopped the market from continuing to push higher. A few days of sideways boring action would do this market some good. Of course we won’t argue with price action, but we do recognize a few boring red closes would do us some good. Do not fight the direction of price. If we get distribution piling up without any further price movement along with our leading stocks breaking down then we’ll adjust. Until then we are on the long side of the market.
Stick with the trend.
