Wednesday’s action saw stocks move higher as hopes of a Fed intervention by cutting rates spread across the stock market. Thursday’s session will be day 3 of an attempted rally. It would be nice to see the stocks consolidate a bit prior to heading into confirmation territory. Volume on Wednesday was light as it appears institutions are not jumping into this market hand over fist. This does not mean we will see this rally fail by any stretch. It may be indicative where we are in terms of the long-term bull market since 2009 lows. We will continue to manage our trading process as usual and in accordance to our own risk parameters.
A little disappointing small cap stocks stumbled a bit yesterday, but the group as a hole got a head start finishing Monday’s session with gains. Ultimately, it would be a great sign to see small cap stocks lead the way to new highs now through the end of the year. With summer upon us seasonality headwinds will do their best to halt any attempt from this market to advance forward. In recent history summer has been quite bullish for stocks. Will we see this summer revert to the norm? As always, we are going to make sure our open risk is in check limiting our downside. There is no need to be a hero in this market. Hero’s lead to zeros. Stay above the water line.
We are not going to guess which way this market will head next. Higher or lower both seem quite plausible. Even a choppy market all summer long would make sense. Keep an open mind when it comes to the market. Follow the price trend and always obey your risk parameters. Cutting losses is of utmost importance. Most cannot cut their losses due to their egos. Eventually, they are worn down and have to tap out of this game.
We hope you have a great day of trading!
