Prior to the market open we received news the European Central Bank released its latest policy decision and the market did not like it. Perhaps they were looking for more QE, but Draghi did mention they are able to adjust how QE is being executed. European stocks were weak and it carried over to US markets. Nasdaq led the market decline, but in a positive development small caps stocks were the best acting group. We did see the Nasdaq break a 4-day win streak. While we did see some selling this market still remains in a very tight range. It may be till next Wednesday when we are able to see this market move with any force. Until then, we’ll continue to stick with this trend and staying disciplined with our strategy.
Sentiment continues to be a non-factor from the AAII survey. Bulls and Bears remain below 30% while those who are neutral remain on top. NAAIM exposure remains high hitting 90% this week. The largest bearish bet was -20%. It was up from last week’s at -50%. Majority of respondents are 100% allocated to equities. We can’t say we blame them as this uptrend has been quite lucrative for most. For those who chose to ignore the price trend. No need to miss out on gains especially when volatility is simply non-existent.
It was nice to see the Nasdaq defend its 10 day moving average. The S&P 500 has barely hung on to its 10 moving average, but it is above it. There are plenty of positives with this market including our holdings. Headline risk is certainly there with the Fed next week, but a rate hike at this point is a very long shot. We do not know how the market will react one way or another. All indications, including the market action and our holdings this market should continue moving higher.
Hard to believe summer is over, but there is no excuse not to get out there and enjoy the weekend. Have a great weekend and we’ll see you back here next week.
Comments
Log in or sign up to join the conversation.