The Gilmo Report

June 17, 2018

June 16, 2018

The market uptrend remains intact, despite a sell-off on Friday, thanks to news that the Trump Administration was moving forward with $50 billion in sanctions on Chinese goods and services. The indexes gapped down at the open, but eventually found support around mid-morning before rallying to close near the intraday highs.

The NASDAQ Composite Index illustrates this with a close near the highs of its daily trading range on heavy triple-witching options expiration volume. In my view, triple-witching volatility combined with a news excuse to sell helped create a bit of a shakeout type of day.

 

GR061718-$COMPQ

 

The S&P 500 Index also closed well off its lows on Friday as volume spiked in typical triple-witching options expiration style. Overall, the action didn’t seem all that deleterious. In fact, given just how frothy things had gotten on Thursday, a little bit of a pullback was more than expected. The idea, of course, is that we want to use pullbacks as possible entry/re-entry opportunities in favored stocks, so we remain focused on the stocks first, and the indexes second.

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