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Small Caps Lead With Gains As Industrials And S&P 500 End Flat

|Includes: AMZN, LEN, RYL, SPDR Homebuilders ETF (XHB)

A very uninspiring day as the market digested gains spawned from a two day rally to close out last week's trading. Volume ended the session lower across the board. Typical for a Monday in this market as traders await Turnaround Tuesday. Homebuilders were exceptional weak today with LEN and RYL looking among the weakest in the group. AMZN followed through on Friday's gains closing off its highs of the session. Today's move was quite subdued given the moves from the Nikkei and DAX, but a quiet day can be good for a market. We'll need to see follow-through from Friday's gains here shortly. Stick to the plan by executing flawlessly.

There are a few IPOs today mentioned in the Big Wave Trading chat room today. They are certainly poised for big gains and are giving us an indication we have another new high from this market. Nothing is certain, but we aren't about to give up on potential gains because of the way we feel this market should go. Healthy action in IPOs often portrays an environment where traders are willing to take on beta risk. Thus, higher prices will be tolerated and not sold into. Stick with price and Big Wave Trading guiding you through the market waters.

Lumber prices have fallen 23% off its February highs and now the homebuilders are beginning to show signs of weakness. LEN and RYL are both below their respective 50 and 200 day moving averages. Not typically a sign of strength. The homebuilder ETF XHB is struggling to hold onto its 50 day moving average. While lumber prices are months removed from its highs the homebuilders were just at highs in May. Did we just see the top in homebuilders? Time will tell, but it appears lumber prices won't be revisiting its highs any time soon.

Tomorrow we'll get a few economic data points, but nothing of great importance. Retail sales will come Thursday and PPI will close out the week. The market will likely begin gearing up for next week's FOMC meeting towards the end of the week. To Taper or not will be on everyone's mind. I hardly doubt we'll get any movement from the FOMC. In any case, stick with the plan and execute.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.