Initially, the market liked the GOP victory last night as stocks jumped higher at the open. It was green across the board until sellers began to attack high beta names pushing the NASDAQ lower. It appears money managers are favoring “safe” stocks as Utilities hit another new high today. Momentum names were hit hard after a few earnings releases were to blame. Volume rose on the Nasdaq giving it a stall day. The Russell 2000 also closed lower than where it opened marking a churning day. The jobs report comes out on Friday and it would be nice to digest these gains a bit further prior to Friday. Today was an okay day, with the SPX NYSE and DJIA higher, but we still saw some former leaders get hit hard. Whatever the market is giving us we will take and we are not about to start fighting the market
We will continue to jump on the names giving us signals and managing our position sizing accordingly. When utilities lead the market it typically means money managers are scared, but need to be invested. There far too many reasons why any manager would be piling into utilities, but we do know they are. It also means momentum names are going to be left to the wayside. Also, with rates so low the search for yield continues to be a story line for many money managers. If a stock meets our criteria we are going to go long the stock no matter if it is a technology name or utility name we are going to get long.
Tonight’s commentary is going to be cut short due to travel. However, stay tuned and continue to stick with Big Wave Trading.
