If You’re Trading Today, Consider This…
The market continues to act well. The Dow and the S&P have
been hitting new highs, and the Nasdaq isn’t far behind. Volume began to fall
off yesterday afternoon. Look for today to be very slow. When trading in
low-volume holiday markets, many times I think it is appropriate to reduce
position size (especially with small cap stocks). The low volume can cause
quick, erratic moves. It also makes it more difficult to get a fill near your
desired price. This means you may experience a bit more slippage than normal.Â
Reduced position size can help you to alleviate some of this slippage. The
market looks strong but is becoming extremely overbought. A sharp pullback
could occur at any time, so make sure your nimble. Still, the long side remains
the place to focus in my opinion.
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Index Action
The most notable index action continues to be the DRG,
which has bounced well over the last two days after the strong Pfizer-related
selling last Friday. Internets have undergone a steep, but orderly pullback
over the last 5 days and may be getting ready to resume their uptrend. One area
exhibiting great strength recently is Smallcaps.
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Short and sweet today.
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Happy Holidays,
Rob
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