Optimism over a Chinese trade deal helped boost stocks at the open. Small Cap stocks initially led, but eventually would be overtaken by the NASDAQ 100. Traders and investors continue to pump money into the NASDAQ 100 as the index remains the leader. We are still waiting on the Russell 2000 to take over the reigns. Volume was lower across the exchanges. Wednesday’s action simply was not an active one as we would normally see for a Wednesday. The overall market does appear to be a bit ahead of itself. A longer period of consolidation would be a welcome sight ahead of earnings. Our focus will remain on what matter and we will remain disciplined in our approach.
Sentiment flattened week-over-week with no real movement in one direction over another. It is not a surprise given the state of the market we have so many neutral participants. So many traders are battered and bruised they simply are numb to the direction of the market. This should highlight to all having an opinion of where the market will head over the next 6 months is not something we need to worry about. Unfortunately, so many do and the only good sentiment brings us is whether or not we are at a extremes. While others worry about where the market is headed next we are prepared for whatever the market will dish out. This distinction helps us continue to win with whatever market condition there might exist. Stick with Big Wave Trading.
Friday’s job report will be something to take a peak at and not for the reason most will be watching for. Sure, most will want to know where the market will go given the report. For us, we will simply act in accordance to our strategy. We cannot move the market nor control where it goes. However, it will be interesting to see how the Bond market reacts to the report. Last months was not too pretty and a guess is March wasn’t much better (who are we to know). Will the Bond market continue to price in a rate cut later this year? Bond yields have fallen since October indicating the economy is not humming along as some might want to you lead you to believe. All very interesting and we will be here with our popcorn watching.
There are still a ton of opportunities and we are going to take advantage where we get our signals. No need to overthink this market. Stay disciplined and make sure you get out and enjoy life!
