Small Caps Lag, But Dow Finishes Strong

AAPL Continues to Lead NASDAQ

Another week of gains for the Nasdaq as AAPL pushes higher into new all-time high territory. Despite the pandemic the Fed has done its job by propping up this stock market. Fighting this uptrend has been proven to be futile. Summer trading continues as volume remains below the 50-day average. No surprises given the light volume as summer is always light. We are on the downslope of the earnings season and it has been quite a season. Never underestimate the stock market to fool the masses with so many companies beating expectations. You would think at some point people would ignore what boils down to a guess. Stick with price action and where strength emerges. Everything else is simply noise. A new week is ahead of us and one filled with opportunity. Time to take advantage of what is given to us.

AAPL continues to impress with its continued strength. The stock is far from any reasonable buy point, but for stockholders Friday’s move added to gains. The stock is nearly up 90% from April 6th. Many thought the world was ending. April 6th was the day the NASDAQ confirmed a new uptrend, and many were not having any of it. AMZN is up 64% since the 6th. ZM is up more than 135%. Jumping aboard leading stocks on a follow-through day is a profitable endeavor. It demonstrates the need to be flexible in your trading and simply ignoring your opinion on the market. The Fed stepped in a big way to place a floor below the market. Will it work forever? Not likely, for now it has and until it doesn’t, we must stick with the price action of the market.

There are plenty of opportunities sitting in front of us. Perhaps we see the NASDAQ take a back seat while managers rotate into other areas. We do not know the future and certainly do not pretend to know. Small caps continue to lag and have been for a few years. Flight to safety has moved from the Dow to the NASDAQ. Trying to figure out the why behind it is useless and will only lead to poor results. We want to win in this game not try and figure it out.

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