Tuesday's session was a bit different than we have seen in the past. Volume was higher on the session as new highs were once again set. The issue was the stalling action on the Nasdaq and S&P 500. This market has come a long way from February lows as well as Brexit lows. Is it time for a bit more of a pullback? Time will tell and today was certainly a question market on whether or not we can continue higher. At this point we must have our position sizes and exits on point. There is no room for reckless behavior and undisciplined trading. Let’s focus on what is in our control and let others worry about what is not.

At this point one day of stalling action is NOT going to trigger us to sell all our longs or even short this market. We need to always be aware of our position sizing and our exits as this is how we control our exposure. How much of our portfolio are we risking? If you cannot answer this question you need to make sure you can answer it. Position sizing and exits are extremely important to any trading strategy. Knowing when to take a profit and/or loss sets the greats apart. We will continue executing our plan and let the market do its thing.

We must remember this is still August and there is a potential for an ugly turn lower. Last year we saw a hiccup in August and it would not surprise us to see the market try and shake out weak hands. September is not a great month either, but anything is possible. As we look out further the Presidential race will matter to many market pundits. Do not waste your time trying to game the market on who might win. At this point, it appears Clinton is on her way to winning. Not much will change as long as the Federal Reserve is committed to keeping equity markets elevated.

There is no magic ball to predict the market. Stay the course. Cut those losses short.