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Volume ends Mixed as Stocks Slide for the Second Day in a Row

|Includes: Adobe Systems Incorporated (ADBE), LCUT, SPRD

Leaders are mixed as the NASDAQ notches a day of distribution thanks to ADBE stock

ADBE stock and MSFT stock dominated the news headlines as both stocks help drag down the NASDAQ and other technology stocks.  The S&P 500 shaved 48 basis points, but volume on the NYSE was lower as the index avoided a day of distribution.  However, the NASDAQ could not survive the volume from ADBE as the NASDAQ notched its 2nd day of distribution.  ADBE traded more than 80 million more shares than it did on Tuesday accounting for the majority of volume increase on the NASDAQ.  Many leaders held up during the session, but a few suffered some bruises.  Today showcases why it is wise NOT to chase stocks, but on the whole today’s selling was normal market reaction to the rise in the market since September 1st follow-through day.


Many traders, looking at Seeking Alpha as well as Stocktwits are looking for another decline like we say in August.  There is always that possibility, but with the NYSE composite indexes:  Dow Jones Industrials, S&P 500, and NYSE Composite all side stepping distribution it highlights institutions weren’t out selling stock.  ADBE stock on the other hand highlights why we at Big Wave Trading only focus on stock market leaders rather than laggards.  Even MSFT stock decline today was on heavier trade after they “didn’t raise their dividend enough.”  The moral of the story is to stick with the market leaders.

At 10 am EST we were alerted to falling home prices ad we saw a decline of -.5% decline in July (month over month) where the market expected a drop of .2%.  Home prices falling more than expected should not come as a surprise, but it gave traders reason enough to try and sell stock.

A couple of leaders went into new high territory, others gave back yesterday gains.  If you buy right and have cushion days like today do not hurt.  However, if you tend to trade scared and buy late you are more than likely going to be shaken out of your position only to see the stock run later on down the line.  Big Wave Trading helps you identify proper buy points and keeps you from chasing stocks!

Last week we saw the number of bulls from the AAII sentiment survey reach 50.89!  Certainly a high number, but this sentiment survey has been very UP and Down.  Sentiment indicators are more helpful near market turns rather than within a trend.  Tomorrow we’ll get the reading from the AAII survey and after Monday’s rise it will be interesting to see if the AAII respondents are expecting a pull back or higher prices.  Regardless, so we have back to back days of the market consolidating gains.

Always cut your losses to protect your capital!

Top Current Holding With Total Returns Up Today: LCUT 139% LGL 41% SPRD 28%

Disclosure: Long: LCUT LGL SPRD