The large indexes recorded their 4th straight winning day. Market players have already managed to forget the headlines weighing on them just a week ago. The fear of a trade war and the Italian debt woes were entirely forgotten – the emphasis, rather, placed on trying to keep up with the NASDAQ and the Russell 2000 which have been achieving new highs day in and day out.

One of the changes playing out since the high recorded in January has been the duration of certain market moves. There have been a few V shaped patterns this year, but the time they lasted was far shorter. In 2017, the market rallied almost linearly from the beginning of August until the end of January ’18. Since then, we’ve seen a number of strong movements, each one, though, lasting a matter of weeks as opposed to months.

For years now, the smartest move has been to not detract from the strength of the trend. The easiest way to fall on your face was to try to predict when the market would peak – and then about-face. There will always be cogent and well-laid out theses explaining why the market is bound to fall at any given point, but truth be told, mortal man simply has no power in this domain! And that’s where day trading live comes in.

Despite the fact that there’s no question that the best strategy in this market is to ride the wave of the momentum, the challenge has become more and more daunting in so far as finding attractive entry points. Amazon (AMZN), for example, has traded up for 9 consecutive trading days, scaling 7.27% higher! Yesterday, the stock ended almost unchanged, but not before recording another historic high at the $1,714.50 price level. Whoever thought at the beginning of the year that a price tag of $1200 for Amazon was too expensive, can now buy in 5 months later at a hefty premium of 45%! That’s why online trading courses are truly essential – they teach you to expect the unexpected!

Over the last few weeks we had written that it was optimal to seek individual stocks over indexes. Over the last few days, things have changed slightly – the market propelled entirely by the indexes, as opposed to individual stocks. The easy way to see this is looking at big caps which bear a larger weight on indexes, prime examples being Amazon (AMZN), Microsoft (MSFT) and Apple (AAPL). With that said, yesterday, buying interest again rotated to the small stocks, the large stocks lagging behind.

In Summary: Despite the rotation in yesterday’s movement, there’s no lack of stocks, stretched to the extreme. That notwithstanding, it’s important to remember that precisely at this point momentum’s tendency is to stretch stocks even more, bringing them to extreme levels that an earthly trader couldn’t even conceive as being logical or possible. That’s one of the focus of our stock market day trading courses and our online day trading courses.

Thursday: Today, the U.S. Dept. of Labor is expected to release its weekly initial unemployment claims reading. The report is expected to point to a slight rise of 225,000 new employment seekers, compared to last week’s 221,000 reading.

IndexLast

Daily change

DJX25,146+1.40%Up
SPX2,772+0.86%Up
NASDAQ7,689+0.67%Up

 

Have a great trading day!

 

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