DJI, SPX, NDX, RUT Closed Lower...Breadth Weakened...US/China Summit Ends...

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SPX -92.74, 7,408, opened and closed lower after the US/China Summit ended. Why?  Because there were more sellers than buyers.  Breadth weakened as decliners led on both the NYSE and NASDAQ exchanges.  

When buyers fill their orders and they have their desired position at that price level, buying decreases, this can create an imbalance between demand and supply.  If volume is small compared with the outstanding shares and the trend remains up, the intermediate term trend generally continues after the pause.

In our iBullyBear mentoring we repeatedly teach and remind that “Trading is a decision-making process.”  Good trading is about making good decisions, and we train our members to make good decisions. 

Good trading is also about doing objective analysis.  We train to members to look at the chart and “Trade what you see.”  Nassim Taleb said, “Don’t tell me what you think, tell me what’s in your portfolio.”  Why? Because when an institution buys a stock in their portfolio, we know their rigorous fundamental analysis indicates to their portfolio manager that this company’s economic growth is worth taking a position and risking real money.

When you look at a chart you see what institutions are doing with the money they manage.  Technical analysis is about what smart money is doing.

Victor Sperandeo who was highlighted in Jack Schwager’s The New Market Wizards book, wrote: “Many people make the mistake of thinking that market behavior is truly predictable.  Nonsense.  Trading in the markets is an odds game, and the object is to always keep the odds in your favor.” 

In my 40+ years of experience in financial markets, I’ve seen no one that has proven they know the future.  People can guess, but that is not knowing the future.  Guessing and knowing are NOT the same thing.

The technical reality is that the broad market is in a seven-week uptrend.  It is in an uptrend because there is more institutional buying than selling.  Will this uptrend end someday in the future.  Highly probable.  Why?  Because every broad market uptrend in the past was followed by an end to the uptrend. 

No one knows when it will end.  If you don’t want to take risk now: Go to cash.  If the uptrend continues you won’t receive any reward because you don’t want to take any risk.  That is okay. 

If you do want to earn the potential reward of an uptrend, you must be willing to take the risk.  The saying is “No risk, No reward.”  That is accurate.  Stock/equity investments carry risk.  You can manage risk, intelligently, but you can’t avoid risk if you want the potential rewards. Just decide if you can take the risk.  If you can, fine.  If you can’t or don’t want to, fine.  Just decide.  Stop wasting your time listening to people who are guessing about the future but pretending they know.  They don’t. They never will.

SPX advancers: DXCM FDS WDAY NOW APA OXY DVN ADBE TYL XOM IT.

SPX decliners: GLW COIN F MU CIEN NEM INTC SMCI AMD ALB APTV.

Earnings season was winding down this week with only 10 SPX companies reporting.  Next week retail stocks HD, TGT, TJX, WMT and ROST report.

NVDA -10.42, -4.42%, a pullback day on 180.9 million shares, EPS on May 20 AMC.

MU -51.35, -6.62%, a bull flag pattern closed above Tuesday’s low.

Market data to follow...