It could be that the market was slightly disappointed by the Fed’s announcement yesterday but investors certainly were happy about Mario Draghi’s. Even though the President of the European Central Bank announced that the bloc’s quantitative easing platform would conclude at the end of the year, European stocks succeeded in recovering from the daily bottom, ending higher after Draghi committed to not raising rates until the middle of next year.

Just like with the Fed’s announcement on Wednesday, there was nothing particularly surprising about the  ECB announcement, but the market was in a buying fervor, and decided to look on the bright side of the announcement.

Once again, tech stocks took the lead – over the small-caps. Names like TWTR, ETSY, and GRUB rallied higher. Over and beyond that, a number of the Chinese stocks we’ve mentioned over the last few weeks continued to rally and are already, now, at high altitude, low-oxygen levels. Take for example IQ. It soared another 16.5% yesterday, with BILI and HUYA surging another 13%. The stock of Dropbox (DBX), issued just a number of months ago, finally was roused from its slumber, skyrocketing 14% yesterday to a new historic high. Screens in live trading were flashing green, stock trading chat rooms pumped with adrenaline trying to keep up with the stock’s jaw-dropping gains.

It’s primarily internet stocks which have heated up, a special emphasis placed on cloud enterprises and Chinese players. The nature of the movement in these arenas is entirely different from what’s happening in the Dow and other sectors, like financial and retail stocks. In effect, the activity in certain areas of the market has gotten so hot to the point that I heard from colleagues, aggressive momentum traders in N.Y. that they’re talking about profit-taking – into the strength. We’re talking about traders who usually feel invulnerable, fear of heights the furthest thing from their imagination. And still, they’re afraid that some of the stocks have overheated.

How will things develop from hereon in?

The bulls need the strength of the movement to expand to other sectors – and for stocks to take the time to digest the latest rally. There’s no doubt that there’s a lot of appetite for momentum stocks as of now, an appetite slightly reminiscent of the mayhem during the dot-com era some 20 years ago. It could be that it’s not so healthy for the market to rally so strongly in such a short amount of time, but it definitely pays to be in the right type of stocks. That’s one of the fundamentals of every online trading course; with value trading, you’ll look for value – as a day trader, you don’t second guess the trend. Every day trading academy is built on that principle and it’s one of the central tenets of being a successful trader!

Friday: Trading today will be conducted in response to the economic report on industrial output, along with the Consumer Confidence Index and N.Y. industrial output.

In addition, investors are expected to response to earnings reports which were released yesterday after closing from ADBE, FNSR, and JBL.

Index Last

Daily change

DJX 25,175 (0.10%) Down
SPX 2,782 0.25% Up
NASDAQ 7,761 0.85% Up

Have a great trading day!


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