The fight this market has is truly amazing and after today’s session it is very difficult to argue against this notion. Even hearing a hawkish Fed official in Bullard making the proclamation the Fed is closer to its targets and will need to raise rates didn’t send socks lower. Initially, the comments appeared to have pushed the market lower. The selling did not last very long as we saw buyers rush in just before 10am EDT to scoop up shares. Perhaps we can attribute to the support by QE and companies buying their own stock, but we can’t know for sure. All we know right now is we continue to see this market find support and buyers at intraday lows. Another positive today was that we have yet to see any follow up distribution after Tuesday’s session. We remain in an uptrend and we continue to see positives gaining momentum hinting we will continue to march higher.
Investors’ sentiment inched more towards the bull camp thanks to the AAII survey results. The number of bulls rose to 37% while bears dropped to 21%. Bears simply do not exist across the board as the number of II bears remains below 20% at 16%. II bulls dropped slightly to 60%, but this survey has remained bullish for much of this year and they have been right. NAAIM exposure index remained at 88% showing on average active managers remain positioned for upside movement in the market. Back to the AAII survey one thing continues to stand out and what we continue to see from the survey is the number of those who say they are Neutral. Given last year’s rise and the Year-To-Date gains folks are still neutral on the market. Maybe when we see the neutral camp flood into the bull camp the party will have jumped the shark. For all we know this could happen in July, but we have price to guide us and we’ll follow along.
Tomorrow is the yearly rebalance of the Russell indices causing volumes to jump to obscene levels. It will be difficult to gain much information from volume tomorrow and we’ll have to ignore it. Volume will not begin to really spike to the last half hour of trading. Just be aware you may see the volume spike and it may cause some awkward movements in stocks. Stay the course.
Do not let your opinions determine your course of action. Stick with Big Wave Trading as we help our subscribers navigate this tricky stock market environment. It is imperative you get out and enjoy the last weekend in June. After all, daylight has begun to shorten. Enjoy the daylight while you can! If you are in the southern hemisphere you are on the upswing! Have a great weekend.
