This stock market has been on quite the tear since October. We have been able to maintain above the major market averages. Despite potential war with Iran the stock market has continued to maintain its trajectory. At some point this market will have a correction and at some point, the reset will help build out new consolidation areas. Now, we are simply managing current positions through our risk management process. There is no need to jump off this bandwagon without a proper signal. While we would guess this market has better odds of moving 5% lower than higher anything is possible. This market has proven anything is possible. Stay the course.
There is no question this market is in overbought territory. Even with the rise in the market AAII Bulls last week ended at 33.07%. The crowd is not overly bullish despite this market hitting all-time highs. Does this mean we will continue to push higher? No one knows, but we are not going to fight this stock market trend. The key to this type of market whether you have your position sizes in check as well as your exit strategy in place. Without a proper risk management strategy in place you run the risk of losing out on gains and opening yourself up to unnecessary risks. There is no need to cause your portfolio the inability to make gains.
What is impressive is the continued push into large cap technology stocks. Information Technology as a group in the S&P 500 gained 1.34%. What eclipsed Information Technology were the Materials sector ending the day up 1.36%. Copper miners were up 4.88% pushing the Materials Sector higher. The lone stock in the Copper Miners group was FCX. Perhaps a group to keep an eye on as FCX broke free from a short consolidation period. Back to tech AAPL continues its monster move reaching another all-time high during Monday’s session. All other stocks are trying to catch up.
Earnings season is underway with JPM and C reporting this morning. An important note to make is when your holdings report their earnings. Any new signals you must be aware of when earnings are released. You may open yourself up to unnecessary risk not knowing when earnings are released.
We hope you have a great day of trading today. This market is certainly in interesting territory. We will sit back and react accordingly to how price moves.
