In Wednesday’s MidWeek Video, I mentioned that I would like to see how the market reacts around these key levels and how it responds to Nvidia’s earnings in order to get more clarity. So far, my instincts tell me that patience will be required over the next month or so before we see a new, SUSTAINABLE uptrend.
As a reminder, know your timeframe! I like to trade those sustainable power trends where I can hold stocks from 2-3 weeks to 2-3 months. I think we will see that again soon, but it’s likely to be later this year. The purpose of this Market Note is to remind members to keep your expectations realistic over the near-term. I’m by no means bearish because we are still in a bull market. I just think it’s worth keeping things light because we are likely to see more chop and volatility, especially during the seasonally weak month of September.
As many of you know, I like to look at the positives and the negatives in the market, and I’m ALWAYS open-minded with my approach. The biggest positive is that the major indexes are still above their 10-week moving averages. One slight negative is that the Nasdaq Composite is currently struggling around this level (as seen from the above average volume distribution day yesterday), and I think it’s because there are too many crowded trades in tech. In other words, the market might need to “wear out” or “shake out” some participants through time or through price before heading higher. Again, I’m not bearish, just expecting more consolidation and a likely range over the near-term. I reduced some exposure yesterday in order to help reduce some volatility for my clients. As always, your decisions should be based on your own plan, risk tolerance, and overall timeframe. I will discuss this in more detail in this Weekend’s Video. Thank you and good luck!