📊 How to Read the Stock Market

Read this before you trade today.

What’s Going on With the Stock Market?

It has been a volatile week thus far.

On Tuesday we had CPI and the market drop precipitously, followed by a rally yesterday.

This has been a tough week to trade because of the volatility and lack of direction. Here are some tips to help you focus your trading for the rest of the week.

Market Internals

First let’s start by looking at sector performance to help us understand where institutions are putting money to work.

The top 5 sectors are: SOXX FDN XLC IGV MJ. It is typically helpful to look at the top holdings of these ETFs to find trade ideas.

Let’s also look at where we are with S5FI (stocks above the 50-day moving average). You can see that we are dead in the middle at 55% so the next day or two will be pivotal to understanding which direction we will move.

Finally let’s look at value vs. growth stock performance.

You can see that we are still seeing value names sell off and growth stocks being bought which is also encouraging.

Despite the sell off on Tuesday the market really isn’t in as bad of a position as you might think.

I dive deeper into the state of the market in the video below: