The day did not start off well and nor did it look good. As noon time approached it appeared as if sellers were going to win the day. However, like magic buyers came rushing into the market nearly erasing all of the day’s losses ahead of the FOMC meeting minutes. A bit of volatility after the release, but by the end of the day the NASDAQ was able to close in the green. Unfortunately for small cap stocks they were unable to get back into green territory. Volume was higher across the board, but now we need to continue to see positive action from this market. We were pleased to see the market rebound.
At midday it would have been easy to pack it in and declare this rally dead. It is a good thing we know better than to let our opinions get in the way of our trading. Remember, central banks around the world are going to do whatever it takes to keep the market afloat. The wealth effect is a theory every central bank subscribes to and will continue to support it. We are not going argue with them. Swimming upstream only works for salmon.
It is a little troubling to see small caps lag behind the general market. The positive for the group was IWM was able to hang onto its 10 day moving average. Today’s low will be something to keep an eye on as we proceed. Let’s see how we proceed. No need to panic, but something to keep an eye on as we finish out the week.
August has been kind to the market. Last August we were dealing with issues in China and a possible rate hike. We did get a rate hike, but it wasn’t until December. Look at the market now we are near all-time highs and for now look poised to continue to hit all-time highs.
Stick with this trend.
