This stock market is tied to whether a trade deal is struck between the United States and China. On the side, there is optimism over a Brexit deal. However, it pales in comparison to the two biggest economies in the world. The broader market was higher on Thursday, but stocks closed well off their highs of the session. Yes, you guessed it IWM lagged behind QQQ​, SPY, and DIA. A typical story in today’s market and one we have yet to see change. Interest rates appear to be normalizing slightly. A good sign for the recession talk. We are in a wait and see the type of market. If we have our exit plan for our longs as well as hedges, we have little to worry about for the most part. We must forge forward and take what this stock market willing to take us.

There are not many bullish respondents in the most recent AAII survey this week. Bulls dropped a percentage point down to 20.3%. Neutral respondents dropped 3.5 percentage points to 35.7. The survey showed Bears ended at 44% a rise of 4.5% week over week. Certainly, could extrapolate from the survey the crowd is quite bearish. Most likely it is due to the fears over a new recession, but nonetheless a bearish crowd. NAAIM Survey showed equity exposure remains a bit light to historical norms. We continue to see this behavior from the market. It would be great to see the market resume making new highs on the back of a trade deal. We shall see.

We reminded folks to run through stocks holding up well in this market. A great way to find new leadership if this market is to turn around and push higher. INMD, SEDG, and EDU to name a few. Obviously, we want to make sure we are not chasing stocks higher. We must have a plan of attack rather than simply flying by the seat of our pants. A lack of plan will certainly get us into trouble as losses would pile up too quickly and the mountain to climb back would be impossible. It certainly is not a time to be a hero, but a prudent investor. Finding leading stocks with a proper plan in place will yield great results. Most are unable to execute.

This stock market has been fascinating and frustrating to participate in. However, with a solid risk management process in place, we have been able to take advantage of what has been given. Good luck with your trading on Friday.