We continue to see earnings report roll in and so far the overall market has not seen an uptick in volatility. During earnings season individual stocks can swing wildly and certain can impact the market’s overall volatility. At this stage, we do not have a situation where the market is sustaining HUGE swings day-to-day. A positive certainly is QQQ, SPY, and IWM all remain above their respective 50-day moving averages. We aren’t out of the woods just yet, but for now it is a positive to see the moving average holding. Our economic backdrop isn’t great, but given we have not seen a recession in 10 years it is only a matter of time before we do. Rates are holding steady, but well off the highs we saw in 2018. We would love for this market to continue to consolidate. Stay the course and continue to control your risk.
This market is something else with the lift off December lows. It would go a very long way if we could get some sort of resemblance of consolidation. Another week or two of sideways action where we see accumulation would set us up with the potential to witness a tremendous rally. At this moment in time anything is possible. Given the political climate almost anything can happen. We must remain open minded and the ability to adapt. Successful trading requires us to be diligent with our position size and exits. Cutting losses is always at the top of list of any trading plan. Be prepared and trade the market that is in front of us.
Big tech earnings does not officially kick off till next week when we get AAPL, FB, and AMZN. NFLX reported earlier in the month, but the market will be laser focused on AAPL. Where will iPhone sales be? Will it matter? Whatever the sales figures are for the iPhone what matters is how price reacts to the news. The company has already pre-warned the market for disappointing numbers. How bad will it be is anyone’s guess, but our focus will be how AAPL and the overall market reacts. The NASDAQ will certainly be impacted greatly and it was the FANG stocks weighing down the index at the end of 2018. It will be interesting to see how we proceed.
Continue to remain vigilant with your exit and position size strategy. Risk management is every trader’s top priority. Do not go into any trading day without knowing how much risk you are carrying. We hope you are having a great week of trading and enjoy our new site redesign!
