Light volume selling was the story for much of the trading session until the final hour as buyers flood the market lifting the market off its lows. Monday’s continue to be light volume trading affairs. Tomorrow we will see volume return and it will be interesting to see how the market reacts. PCLN reported earnings and their guidance disappointed the market. This is not the norm as many NASDAQ 100 names have done well during this most recent earnings season. The dollar is now back in the limelight as its rise towards par is on many macro minded traders. After a long run up from the August lows it is no surprise this market is taking a breather. While today’s losses were a bit more than we’d like in one day today was not all that bad.
We continue to see many traders discounting this rally and looking for us to roll over. From a seasonality stand point this market is far from an area where declines happen often. While it is not out of the realm of possibilities this market will see a ton of people turn bearish faster than Peyton Manning will choke in the 4th quarter of a playoff game. Seriously, the quarterback has 9 one and done in the playoffs. From a daily perspective we still are somewhat overbought and further consolidation cannot be ruled out. They key will be to continue to manage risk via exits and position sizing.
What is interesting is we are still receiving buy triggers from a few stocks in this market. For a market that for some is ready to roll over we would not be necessarily getting buy triggers. More often than not we would have a lot of intraday stops hit. On the flip side we are not getting signals where we are plowing 10% into names. We can only react to the signals that are shown to us rather than trying to shoot from the hip. Regardless of what you think where this market is going we continue to see signs this market is not ready to give up on the chance of hitting new all-time highs.
Continue to manage risk and react to price signals accordingly.
