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Joshua Hayes
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Joshua "MauiTrader" Hayes is CEO, President and founder of Big Wave Trading Inc., a Maui, Hawaii-based stock market advisory service. Hayes is a well-respected stock trader who combines fundamentals, technicals, psychology and money management to trade professionally for his personal,... More
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  • Small Caps Lead The Market Lower; Volume Slips Again 0 comments
    Feb 23, 2012 2:24 AM | about stocks: XHB, GLD, SLV, QQQ, SPY, DIA

    Another quiet day on Wall Street where stocks close near the lows of the session, but volume falling below yesterday's level avoiding a day of distribution. We did receive downbeat news from the housing sector sending homebuilders lower. Gold (GLD) and silver (SLV) continued to add to their gains today showing the precious metals believe in continued expansion of central banks' balance sheets. The close was somewhat disappointing not being able to lift off the lows of the session, but with volume really light institutions weren't selling stock in droves. We continue to consolidate the most recent gains, but we would like to see a bigger push by leaders to emerge from this consolidation.

    Existing home sales did disappoint today, not badly, but enough to send home builders much lower today. XHB - the homebuilder ETF was down 1.46% today after the news. It is important to note the homebuilding stocks have been what have led this most recent rally. To see the group struggle certainly signals a possible rotation by the market or worse a top. While we can't predict tops, or rotation it is best to stock to a sound trading discipline to avoid confusion. Stick with the rules.

    Outside the XHB, GLD and SLV took center stage moving higher. Yesterday, the precious metals performed very well and today the group continued yesterday's strength. Continued strength in precious metals certainly hints at continued expansion, better yet money printing by central banks. Typically, when precious metals rise in the case of balance sheet expansion stocks rise along side the precious metals. Central banks do not have any more ammo other than to print money and they will do so until the system breaks or they are successful. Either way, easy money translates to higher asset prices.

    Remember to always cut your losses short.

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

    Themes: Stock Market Analysis Stocks: XHB, GLD, SLV, QQQ, SPY, DIA
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