S&P 500 Hits another All-Time High

Today was a quiet day in the Market as participants ease back into trading from the summer weekend. Existing home sales disappointed where by sales dropped 1.2% month-over-month. Clearly higher rates have put pressure on the housing market. Chicago Fed Activity index show a slight drop of .13, but who really follows this index anyway. The disappointing housing figures helped push the market higher. When there are no sellers it is quite easy to push the market higher with very little volume. Volume dropped from Friday’s option expiry inflated figure, but we weren’t really expecting volume to surge. The S&P 500 hit a new all-time high on small gains, but hey it is still a new high. Distribution really isn’t hounding the market and we still no reason to call a top here. This market continues onward and upward with this uptrend despite those who continue to fight the trend. Earnings continue to be the focus and MCD delivered its results prior to the market open. Unfortunately, it missed its estimates and the market punished the stock throughout the day. Overall, those who eat less MCD tend to be a bit healthier people in general. MCD clearly weighed on the Dow Jones Industrial Average and the stock does appear to be entering into a downtrend. MCD is not a typical name we’d be involved with, but given its price action to date we’d avoid the long side. Housing stocks will begin to deliver its earning releases shortly. ITB and XHB continue to look very top h heavy. ITB looking the worse out of the two, but both clearly are struggling at the moment. Nothing in this QE/ZIRP driven market would surprise us, but it does appear the housing stocks are set to go lower. PHM reports before the bell on Thursday and it appears to be rolling over. So much of the economic recovery talk has been surrounded by the housing recovery will make this week interesting. SHW disappointed with its earnings, yet HD and LOW are near or at highs. LL reports on Wednesday too. HD and LOW do not report till the middle of next month. Keep an eye on housing stocks as well as to those who are tied into it. Gold and silver pushed off their lows nicely today. Certainly here in the short-term a bottom is in place. We have certainly seen a few cover here. Does it mean gold and silver are headed back to 2012 highs? It does not. We’ll be patient and wait for proper entries and use proper risk management before entering into any trade. Nice way to kick off the week with gains. Stick with the process and have a great week!

Volume Jumps and Stocks Fall Ending the Market’s Uptrend

The NASDAQ Composite loses its 50 day moving average on heavy volume. AAPL and GOOG lead the NASDAQ 100 lower as the big cap technology closed down 1.99%. Commodities followed stocks lower with copper and other metals leading the charge lower. The Federal Reserve’s Beige book showed moderate growth due to autos and housing but did very little to lift the market further off its lows. Blue chips continued their outperformance with help from JNJ and HD. The action as of late is certainly along with volume has thrown our uptrend out the window. We will act accordingly to our rules. Economic news has not been good across the globe and up until this week the market has ignored them. This morning BAC released disappointing results and CSX CEO stated this economy would only grow 1-2%. Two percent growth is simply not good enough and anything less than 2% would cause big impacts. Many estimates from the public to private sector are counting on growth to solve our problems. If growth doesn’t show up it will cause significant impacts to bottom lines. Earnings will continue to pour in and while there was quite a bit of optimism heading into this earnings season it is how the market reacts is what is important to us. We do not pretend to even think we could predict the future like many pundits on CNBC and Bloomberg. Our focus is on our trend following process to set ourselves apart and obtain superior performance. Focus on price action and using our rules to know when to get in and out is how we drive superior results. Tomorrow we’ll get our weekly look at Jobless claims. It is anyone’s guess how the number will turn out, but it is sure to get a good rant out of Rick Santelli! Who doesn’t love a good rant every once in a while. Perhaps we have our correction that every bear has been calling for at our doorstep. We simply won’t know until it is over. Stick with Big Wave Trading and we’ll get you to a higher level of trading. Cut those losses and ride your winners.