Summer time trading is coming to a close quickly here as traders gear up for a long holiday weekend. The NASDAQ led the market higher gaining 1% on the session. Volume was mixed on the session and despite its gains NASDAQ volume fell while NYSE volume rose session over session. GDP was better than expected rising 4.2% vs. 4.0%. Consumer Discretionary led the S&P 500 higher followed by Information Technology. Both groups rose more than 1%. Telecommunications held the S&P 500 back losing .76% as a group. These gains continue to come our way as this market continues marching higher. Even with headwinds from seasonality this market has been impressive. We still miss the massive gains prior to 2008, but given what this market is willing to cough up we will take what we can get.
These markets are not what they used to be. Prior to the “Great Recession” we would have many stocks moving 50-100% in a relatively short period of time. While there are some that still move like this they are very few and far between. We can dwell in the past and wish the present to be like the past, but we’ll miss too many gains. Wishing is not a wise move when trading stocks. It will cloud your judgment and impair your ability to make real solid gains. We follow price action and not opinions about what may or may not happen. Stick with our time tested process.
Sentiment continues to creep up towards extreme levels. No matter the survey II , NAAIM, or AAII all show Bulls getting giddy here. AAII Bulls jumped back into the 40s at 43.5%. Bears dropped to 24%. Does this mean we automatically drop 20% into a new bear market? No, not by any stretch of the imagination and it would be a huge mistake to trade on fear of the market pulling in. We are likely to get some consolidation and this is to be expected. There is no need to panic. Trust your exit strategy.
This has been a good week of gains as we head into the close of August and summer trading. It would not surprise us to see this market consolidate gains the first few weeks of September. Seasonality is still upon us, but we’ll keep a close eye on our position sizes and exits. We hope you have a great long weekend in the states!
Hi Joshua,
Can you direct me to any information about your trading strategies (can slim, perfect speculator, bop, etc.) and stop placement.
I am trying to emulate your strategies. I am only entering your new position/stops as of 8.18.18.
Thank you so much your returns are amazing.
Michale Stapleton
Hello Sunbeam! Love the name!
I recommend reading two books: How To Make Money in Stocks by William J. O’Neil and The Perfect Speculator by Brad Koteshwar. There is also a learning center at IBD that might assist but those two books are the must reads. This will teach you exactly what I am looking for in my new long positions. I then have built scans in Telechart to find these kind of stocks. If you have Telechart, I would be more than happy to send the file your way. As for video lessons going over my scans, how I find these stocks, and what I look for, the evening video lessons is a great place to learn. Watch the last 100 of them. Also study the last 100-1000 Top Current Holding Updates I have posted on Social Media. In time, if you give yourself a chance (everyone’s time frame is different), I am 100% sure you will be able to find the stocks I find and learn how to trail stops properly the way I trail stops. If you have any further questions or need any further assistance, please reach out. I promise to respond ASAP. Aloha Michale!