A decent start to the second quarter as the general market gained more than 1% on the session. Volume came in lower when compared with Friday’s inflated end-of-the-month rebalancing. This is expected behavior from the market. Crude oil has been on a tear this year now firmly above the $60 level. Consumers have been enjoying lower gas prices and by the looks of it will be feeling a bit of a pinch. One downside to the action was the Russell 2000 and its lack of leadership seen over the past few weeks. While the index has consolidated nicely we would like to see some outperformance from small caps. We cannot dwell on the fact we don’t have small caps leading, but go with what we have. Our focus will remain on what is working and maintaining our risk management process. Keep on grinding and keeping your risk in check.
Big Cap tech names continue act well. AAPL, GOOGL, and AMZN all look poised to continue to push higher as their quarterly earnings reports approach. NFLX has been moving sideways for a bit and it is set to report on the 16th of April. A few more weeks until we get some fireworks from the market. For now, it is a positive these names are not showing weakness. Whether or not it will continue post earnings will be another story. All we can do is control our risk through position sizing and entry/exit. There are plenty of opportunities this market is presenting us and we cannot worry if we will take small losses. We do not want to miss out an opportunity to take gains from the market.
Economic concerns globally still exist. There are questions regarding the German economy as well as on-going Brexit issues. We can dwell on the fact we may see a slowing economy, but what truly matters to us is how the market reacts. Too many will try and anticipate what will happen next. We do not know the future. We know what has happened and react accordingly. Our risk management process is what sets us apart. Those who win are those who are able to buy right, take small losses, and ride their winners. It is a formula that has been around as long as the market. Most cannot follow it. This isn’t new and we did not invent this process, but we are disciplined and steadfast with the approach. Learn from us.
We hope you have a great day of trading and best of luck for the rest of the week.
