Monday’s session saw a day of distribution with volume higher on the NYSE and NASDAQ. Russell 2000 followed by the NASDAQ Composite led the market lower. Not the way you want to start the week with distribution but given last week’s holiday shortened week volume was certainly light. Powell will be giving a speech today and there is little doubt the market will be keen to hear whether a rate cut is in the works or not. Our stops are in place in the event the market turns south on us. We do not want to miss out on any upside potential. We are amid summer trading and anything is possible. Be ready for anything and everything. Monday’s trading session highlights the need to always have a sound plan in place. Be ready for everything.
Summer trading typically is not kind to stock market bulls. Despite the last few summers which produced decent uptrends most summers end up frustrating stock market bulls. This market tends to be anything but conventional these days and it is wise to keep your open risk in check. This way if the market does turn against us, we can get out quickly locking in our current gains. On the flip side, if we continue to see the market work higher, we are not left behind because we are already long and strong. If your position sizing is too large and/or lack an exit strategy you must correct this immediately. Do not get left out in the open where the market can take your hard-earned gains.
We will continue to keep a close eye on this market as we get deeper into the month of July and summer. Another earnings season is upon us and we expect some volatility as a result. As a reminder please make sure you know when your stocks are reporting. Too many do not know and are blindsided by a bad reaction to an earnings report. Keep in mind you do not know the future! Guessing how a stock may react to earnings is no plan to extract gains from this market.
We hope you have a great day of trading.
