A solid day for the equity markets as stocks rebounded after Monday’s hefty losses. Volume was lower across the board as the NASDAQ 100 led the way followed closely by the Russell 2000. Day 1 of an attempted rally for this stock market. Would have loved to see volume expand, but the lack of institutional interest is a bit concerning. Perhaps the Fed comments gave buyers the confidence to enter back into the market. We are coming off deeply over sold conditions. A rally is not surprising here, but if price continue a confirmed rally may be right around the corner. Of course, anything can happen from here and why it is paramount we have our risk management process in place. It would be unwise to simply plunge back into the market without a plan. Always know your trading plan as we cannot stress this enough. A good start at an attempt to rally, but a lot more work needs to be done before we can declare this new rally attempt is confirmed.
The unofficial start to summer occurred over the Memorial Day weekend holiday. Officially, summer doesn’t start until on June 21st with the summer solstice. For all intents and purposes, we are going to begin to see summer like trading beginning very soon. Volume should subside as we head further into summer as many take their summer vacations. No matter where we are this market will always be number one. We encourage people to get out and enjoy life outside of trading. It will help keep a sense of balance and purpose. What good is trading if you cannot enjoy a little bit of the fruits from your labor? Big Wave Trading will always be here to help you achieve your trading success.
It was nice to see IWM near the top of the leaderboard yesterday. Given the decline in the QQQs on Monday it is no surprise we saw them lead the way Tuesday bouncing back from significant losses. Do not get us wrong SPY and DIA had nice days but were a bit behind QQQ and IWM. A few stocks we have mention in the past continue to hold up well. TNDM and MDB continue to look strong with TNDM looking to breakout at any moment. There are plenty of stocks out there setting up in bases. We will find them!
Day one of an attempted rally volume is not a hard requirement and would have been nice to see with these price gains. However, once we get to day 4 of the rally we’ll see to see volume expand day-over-day to confirm the new rally. Until then, as long as we hold Monday’s lows we will not negate this new attempt at a rally. Be patient and not attempt at hero status with this market. You will ultimately lose the battle. Best of luck to your trading!
