Quiet Day in the Markets; Stocks Finish off their Session lows Friday’s better than expected jobs report has been overshadowed by geopolitical events and a possible terrorist attack on a Malaysian Jetliner (let the facts sort out speculation). The NASDAQ closed lower for the third day in a row, but was the major index out of the four we monitor. Russell 2000 was the worse performer on the day closing lower by 23 basis points. Nothing too concerning with the market aside from a few momentum stocks experiencing some selling. Today was also impressive as the Shanghai Composite sunk below a key psychological level of 2000 after it had disappointing trade figures. The uptrend remains in place and we’ll need to see a bit price clues to reverse course. Stick with the trend. The situation in Ukraine continues to be one that lurks in the back of every traders mind. Perhaps if you sold on Friday’s pop you are still okay, but why position yourself using a situation that may not occur? So often we see traders thinking they know more than market and front run a potential “event.” In majority of the cases they do not know more and end up losing money because no one is smarter than the market. It is best to take our approach of trend following and letting price dictate our actions. Interesting enough the NASDAQ has five distribution days while the S&P 500 has only one. There isn’t a ton of distribution in this market and while it can always be around the corner right now we don’t have enough. This market has been quite immune to distribution as well. Only in 2011 where we had a decent size correction did we see distribution spell trouble. Last June we had a bunch of distribution piled up and yet the market was able to turn around and produce some fantastic gains. Price is really number one and enough of your portfolio is in sell mode it is a good indication where the market is heading. Price always wins. Not the best start to the week, but at least we started. Stick with the process.
Posted on: Tue, 11 Mar 2014 01:57:09 +0000
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