A good day of gains across the board from stocks on Tuesday. Volume was mixed on the exchanges as NASDAQ volume edged higher while NYSE volume decreased from Monday’s level. Not a bad session by any stretch of the imagination, but we still see small caps lagging staying within its current consolidation area. Materials sector led the S&P 500 on Tuesday gaining nearly 2%. Utilities was the worse performer on the session. The VIX continues to slide lower as expectations of volatility decreasing over the next 30 days continues. Investors simply aren’t expecting the market to have much volatility. As a result, UVXY hit a new all-time low. Not a bad session at all, but Wednesday’s market will now have to contend with the DOJ as the department announced a broad antitrust review of Big Cap Tech stocks. Should make things somewhat interesting. Our uptrend is still intact and until evidence suggests otherwise, we are going to stick with it.
In the short-term we still have earnings reports to contend with and next week’s FOMC meeting. Thursday’s session will need to deal with the ECB rate announcement. While it is likely we will see the ECB cut rates it is anyone’s best guess how European markets will react. Not to mention if US markets will even care what the European Central Bank does. Our focus will always be on the price action of stocks. No need to get into the guessing game.
Hard to believe July is almost over with. We hope you are having a great month. This market is not for the faint of heart and continues to dumbfound many. Remember, Bond Funds are raking in extraordinary flows despite the stock market at all-time highs. Not what you would expect. We can pin this on demographics, but the record flows is a bit odd considering. Perhaps many still fear a 2008 is around the corner. We did see many get very bearish December of last year. Luckily for us we pay attention to what matters: price. Others were focus on the noise. Stick with Big Wave Trading.
We hope you have a very profitable Wednesday!
