Wednesday, September 04, 2013

Syria Headline Clips Gains; NASDAQ Shines as Volume Rises

Another day and another missed shot at a bona fide follow-through day. However, given the volume surge in the NASDAQ and its ability to clear/hold yesterday’s high things are brighter than they may seem. The Fed’s Beige Book release did little to stock movement, but now with the focus on data it appears the Beige Book has been left in the dust. All eyes continue to drift towards Friday’s job report and continue to ignore what they should be paying attention to. It is clear the NASDAQ has and continues to be the clear winner amongst the major market averages. While we didn’t get a true follow-through day today is much more positive than meets the eye. Anything is possible and with a lot of headline headwinds many will be fearful of what may or may not happen. Sure we can get a rush of sellers completely wiping out gains over the past two days, but we are missing one key component: our crystal ball. No one knows the future and we can only trade the now. While we still have a short-term downtrend it is looking more likely this market pulls out of the recent trend and resume moving higher. Volume has been above average the past few days with solid gains, not something we have been accustomed too. Stick with the process regardless of what your opinion is. We all know cutting losses and riding your winners is a staple of trend following. Ignoring these rules is hazardous to your trading. Another rule when broken that is even worse is not taking your signals. Ignored Entries/Exits over time will erode your performance greatly. Imagine losing your biggest winners over a course of the year…you’ll notice you will significantly lag the market. Not taking an entry signal and missing on potential gains is just as important as taking an exit signal. Failure to do so will end up costing you in the long run. Ride your winners and enjoy the ride.

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