Markets Resume Trading after Sandy Ripped Through the East Coast

Two days of trading were lost due to the storm, but the aftermath for many remains a daunting task. We at Big Wave Trading hope those who were affected by Sandy return to a sense of normalcy soon. The Russell 2000 led all market gains today, but was the lone bright spot in the market. AAPL’s management shake up weighed heavily on the stock as it dragged down the technology heavy NASDAQ with it. At the open stocks enjoyed a lift, but it was a negative Chicago PMI figure that soured the mood of the market. PMI figures showed a contraction for the first time since late 2008 as many continue to fear the fiscal cliff. Big Wave Trading is still under a sell signal and today’s market did very little to help reverse our course of action. Price and volume are not favorable here and until it improves we’ll continue to operate under our sell signal. All eyes will be on the ADP and jobless claims report tomorrow. Friday’s non-farm payroll figure is set to be released and it will be an important to Romney and Obama. Gary Johnson the Libertarian candidate can too use this to show under freedom and his leadership we would be able to build a more stable system. For Romney and Obama it will be a fight over the same system we have in place today. Of course, the mainstream media will do its best to spin it positively for Obama while Fox News will do the same for Romney. In the end, we care about our leading stocks and market direction. As the market goes we shall go too. The leading sectors today were the utilities, consumer goods, and financials. Oil and gas along with Technology stocks were the groups weighing on the S&P 500. Financials continue to be the stocks leading this market and we aren’t surprised. How can you not do well when you have a buyer willing to pay top dollar for a junk asset? Continue to keep an eye out for emerging winners because this market can snap back on a dime. It is good to be back in the saddle. Cut your losses short.

Small Caps Reverse Hard Intraday as Stocks Close Well off the Highs of the Session

Positive ISM figures helped the market surge to the session highs only to see sellers take away the day’s gains. ISM Manufacturing grew more than expected and buyers jumped at the chance to move into the market. However, by the afternoon cracks began to become apparent whereby AAPL and small caps began to turn lower. Selling continued throughout the remainder of the trading session with small caps leading the charge lower. PCLN and AAPL helped drag the NASDAQ lower, but the index was able to close in positive territory. Volume was higher on the day and with the mixed action does not instill confidence in this market. Mixed action overall and we continue to operate under a cautious buy signal. AAPL continues to struggle after its earnings release. The stock is trading quite loose and is in danger of losing its 50 day moving average. There is no doubt that if AAPL turns sour you can almost guarantee the market will move lower in sympathy. Price should dictate on how you trade and this instance there is no need to anticipate the move. Stay patient and let price confirm the move before acting. Crude oil was higher on the day as the commodity continues to hang above $100 a barrel. Given prices are staying high the continued stress on the average Joe continues. What is interesting is the math simply doesn’t compute with oil this high and the market being able to absorb the high prices. This is precisely why we only pay attention to price in this market. Our opinions are very much useless in the market as they are often wrong. Logic simply doesn’t work only price! Tomorrow we’ll get a read on the jobs market with the ADP employment report set to hit the airwaves. This Friday we’ll get a read on jobs from the month of April and if it was like last months we’ll have a very tough market to deal with. There isn’t any sense to go ahead and jump the gun because no one can predict the future, not by a long shot. Stick with the trend. Happy Trading! Cut those loses short.