Weak Leadership Gets Weakier as Stocks Rise Lead by Small Cap Stocks

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IBD Indexes suffer losses as the broader market averages rise on volume.

Stocks enjoyed a day of gains while volume rose above Monday’s level. However, it came at a price as the stocks within the IBD 100 fell hard pushing the index down more than 1%. This isn’t a horrific sign as leadership has been weak off the lows, but it does spell trouble for any hint this will be a sustainable rally. I do believe we can still run higher, but there is significant overhead to punch through. It’ll prove to be too much for the market when we reach those levels.

I stepped in for my colleague Joshua Hayes and wrote the daily market commentary at Big Wave Trading dot Net. Please go and check it out. I explain some historical similarities with the past. It is quite interesting how we are setting up.

One thing I did note in the commentary was the need to book profits if you have them. I do not see this market lasting in strength and gains can evaporate rather quickly. Take it upon yourself to lock in those profits and live to fight another day. By taking profits, not entire positions but a portion of your position off the table you ensure that you take the paper profit and turn it into cash. It is important that you preserve capital, when we get a new bull market you’ll need it to make the big money!

Best of luck!

Enjoy,