Once again, we are at a familiar spot with this market. Worries over trade and the Fed have piled up. The real issue is whether a trade deal with China will get done. During Tuesday’s trading session we heard the Fed was not to be used as a short-term political policy tool. Couple the fear of not getting a deal done and no Fed support you can imagine what traders were going to do next. The NASDAQ led the market lower by a significant margin, but all major exchanges suffered losses. For the first time in awhile Small Caps weren’t leading to the downside. We will certainly need to see this market reverse course during Wednesday’s trading session. For now, we have our positions sizes and risk properly executed.
Headlines prior to the open have the Chinese and US trade deal nearly 90% complete. This does not mean the deal is done or even close to being done. We have no idea what is left to negotiate over, and it could very well be easy. Or the 10% that is left will be impossible to negotiate and a deal will never get done. The outcome is not easily predictable, and we are not going to guess what is happening next. At this point, most believe once a deal is done this market will have a clear path to even higher new all-time highs. We welcome anything and everything this market can dish us. It would be fantastic to see this market rip higher. Our focus will remain the same no matter what the market will dish out and you should follow suit. Keep an open mind and execute the game plan.
GOOGL is struggling quite a bit recently. AAPL, AMZN, and NFLX all seem to be hanging on just fine. For some reason the market is not being kind to GOOGL. There is probably a very good reason for the fall from late April, but it doesn’t matter what the reason is. All we care about is the stock broke through support and key moving averages. The big cap technology stocks are always a good gauge as to how the NASDAQ will perform as they make up a large portion of the index. Despite yesterday’s fall even MSFT is outperforming GOOGL in a big way. Keep an eye on these guys as this market heads into the summer months.
Before we close out Bitcoin (BTCUSD) continues to power higher. Even with FB Libra coming to market soon BTCUSD continues to march higher. ETHUSD continues its march while LTCUSD is still in a small consolidation period. Cryptos are certainly making their way back into the spotlight.
We hope you have a great day of trading this Wednesday!
