Archives for June 2010

Good evening StockBandits!

A sharp selloff yesterday elevated the possibility for a narrow-range day today with the need for some rest.  That’s exactly how things shaped up early in the session with some quiet price action and a lack of momentum.  The indexes spent the morning in positive territory, but a growing impatience with the lackluster bounce left traders wondering whether they should sell again to avoid a deeper decline.

That delivered some afternoon selling, which not only erased the minor early gains, but accelerated the pace of the decline into the closing bell.  In the end the indexes gave up another 1% as they took out additional support zones to reach new correction lows.  Clearly, it was an ugly way to finish the quarter.

The scenario from here could easily play out with some kind of exhaustion move to the downside tomorrow before an upside reversal kicks in.  That isn’t to say that the lows would hold, but rather that the odds of a bounce are increasing exponentially by the day.  The QQQQ just shed 10% since last week, for example, with 8 consecutive declines.  While I’m not one to be over anxious to fade streaks, the fact that this decline is unsustainable and the breach of support zones opens the door for traders to get trapped with how easy the downside move has been.  The bears have faced no opposition lately, and anytime either side finds the waters that smooth, it’s an excellent clue to watch for a possible shift – even if it’s only short-term.

The next couple of days are going to be quite interesting, as we’re deeply oversold and facing the first day of a new quarter tomorrow.  Then we have Friday ahead of a long holiday weekend (with the market being closed on Monday in observance of Independence Day).  Friday could very well be a quiet day as traders disappear from their screens to head out for the holiday, and we’ve seen a lot of big moves on Thursdays in the past 2 months as well.  Therefore, tomorrow could prove to be pivotal if this market is going to reverse…we’ll just have to see.

I’ll outline what I’m looking for in tonight’s video, but the bottom line is that this is a spot to be very careful with new shorts and best to wait for signs of life before getting long.

Here is tonight’s video:

The Bandit Broadcast Video – Click to Watch!

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Video Stocks Discussed: BIG, DRI, LEN, PCP, DIA, SPY, QQQQ

Swing Trading Candidates:

NONE TONIGHT

Bullish Watch:

CBOE, LNCR, NTES, NEM

Bearish Watch:

GS, RAH, DWA, MFE, LEN, MON, DRI, MED, BIG

The Hit List will be coming out soon with discussion on open positions and swing trade stops and targets, so be sure to watch for it.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

A steady pullback from the recent high was followed by a few days of inactivity.  It was uncertain whether that would prove to be stabilization before a bounce, or merely a rest before more selling.  That uncertainty disappeared today as stocks broke down hard, gapping lower and continuing south for the remainder of the day to post 3-4% declines in the major averages.

The NAZ and S&P 500 each marked new correction lows today as they took out both the June and May lows.  What was perhaps most notable was the fact that no attempt was made at a bounce from those zones, exhibiting the sheer lack of buying interest.  This of course means the bulls have squandered an opportunity at creating a higher low, and serves as an excellent reminder that we’re still in a correcting market environment.

What’s so tricky right now, however, is the fact that stocks are breaking down but are too extended near term to be shorting for anything but quick trades.  While the weakness could certainly persist before we see a relief bounce (or rest), most names have already made sizeable moves in the past 7 sessions, elevating the risk on initiating new short positions for timeframes outside of a few hours.  Keep in mind, we’ve seen market declines in 6 of those 7 sessions.  It’s important to recognize that even though some key levels have been broken, a snapback rally could kick in at any moment.

Heading into Wednesday, my game plan is to remain in cash and stick with intraday trades.  The dust needs to settle a bit before clean enough patterns for swing trading will emerge, so it’s important to protect capital in the meantime and let those trades come to us.

Here is tonight’s video:

The Bandit Broadcast Video – Click to Watch!

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Video Stocks Discussed: BIG, DRI, DWA, RAH

Swing Trading Candidates:

NONE TONIGHT

Bullish Watch:

SRCL, DPS, EXPR, NEM

Bearish Watch:

MED, BIG, MDC, AGP, NTRI, DRI, LEN, DV, MFE, DWA, RAH

The Hit List will be coming out soon with discussion on open positions and swing trade stops and targets, so be sure to watch for it.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

Today’s action was quite indecisive right from the start, with some intraday reversals preventing either side from gaining any lasting momentum.  In the end, the market finished little-changed from Friday’s levels, but yet in the red once again.

Some important levels are still being respected though, and that holds a little promise for now for the buyers.  Nonetheless, the bulls will need to get in gear soon and put cash to work if they want to produce that higher low they’re looking for, rather than simply stand aside and allow the bears to send stocks right back toward the lows.

If there’s one thing that’s been consistent about this market for the past couple of months, it’s the fact that reversals have come on a pretty regular basis.  Timing is everything in trading, but of course if an upside reversal arrives sooner than later, it would give the index charts a far better appearance for those who are looking for higher prices.  For the moment though, things are simply stabilizing, leaving the ball in the bulls’ court.

Heading into Tuesday, there are a handful of charts I like the looks of, but only for quick trades.  One of the swing trades from last night’s Broadcast triggered today (FAST), while the other (CTRP) did not and has been removed due to relative weakness today.  More notes are of course included in the Hit List post.

Overall, I’m staying conservative here while waiting for the next move to begin, and that should allow me to move quickly once this rest phase is completed.  I’ll cover my plays for tomorrow in tonight’s video – hope you enjoy it!

Here is tonight’s video:

The Bandit Broadcast Video – Click to Watch!

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Video Stocks Discussed: CRUS, NZ, AGP, FTI, CNW, DV

Swing Trading Candidates:

NONE TONIGHT

Bullish Watch:

AKAM, FFIV, SRCL, FAST, OVTI, ARMH, CRUS, NZ, NTES

Bearish Watch:

RL, DO, MED, HD, AGP, AMG, FTI, QCOM, WDC, PBR, UPS, CNW, GES, R, MON, FO, AGU, DV, LLL, ANF, CEDC, DRQ

The Hit List will be coming out soon with discussion on open positions and swing trade stops and targets, so be sure to watch for it.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

The major averages pulled back in a steady fashion last week, giving up 3-4% as the bulls went 1-for-5 on the week.  That pullback came right off the June highs, which of course were established after nearly a one-way rally up from the lows.  There’s been plenty of back and forth in this market, which means it’s still reversal-prone and very much catering to traders.

The good news at this point is that some stabilization seems to be setting in with Friday’s action, leaving the indexes just above some key levels.  In addition, the pullback has come on light volume, which suggests the buyers haven’t completely disappeared in an effort to raise cash.  And finally, with a steady pullback off the highs, this market still has good potential to establish a higher low on this dip.  Relentless moves tend to be more reversal-prone, and the lows are still a considerable distance away, and that raises the odds that at least a short-term tradeable bounce may arrive soon.

The key for the week ahead will be to see stocks show some signs of life again to help create that higher low look on the daily charts.  We’ve already seen higher highs created with the early-June highs being cleared last week, so the next element the bulls will be pulling for is going to be a higher low.  The opportunity is before them, so all eyes will be on the buyers this week to see if they can produce it.

It’s too early at this point to declare this a major turning point for the market, and in fact many still fully expect to see the June lows penetrated eventually.  Things may play out that way, but for now as short-term traders, our job is to identify good opportunities and capitalize on them.  Things look somewhat short-term oversold at this point, so it’s a good spot to exercise caution with new shorts.  Shortened timeframes are always best in reversal-prone markets, so keep that in mind this week as well.

For tonight, my notes are on the charts below for index levels and potential trades I’m eyeing for Monday.

Please leave your comments and/or questions below if you have any, I always enjoy the interaction.

Chart courtesy of StockFinder

Chart courtesy of StockFinder

Chart courtesy of StockFinder

Chart courtesy of StockFinder

Chart courtesy of StockFinder

Swing Trading Candidates:

FAST has pulled back in recent days to create a falling wedge pattern, which is bullish since these usually are resolved to the upside.  Given the upward momentum this stock exhibited prior to this wedge pattern, I like the potential for another leg up soon.  I’ll be a buyer for a swing trade if this one clears the upper trend line at $52.75.  My stop and target levels are displayed in the Hit List post.

Chart courtesy of StockFinder

CTRP broke out two weeks ago and then last week pulled back on light volume.  The pullback held the breakout zone (dashed line below), which is very positive.  This one has had some nice recent momentum, so a turn higher from here could produce another nice advance.  I’ll be a buyer if the trend line is broken at $44.40 for a swing trade.  My stop and target levels are displayed in the Hit List post.

Chart courtesy of StockFinder

Day Trading Candidates:

These are the trades I’m eyeing for potential plays tomorrow. I will not be holding these overnight, and will wait for these levels to be crossed before entering trades.

Chart courtesy of StockFinder

Chart courtesy of StockFinder

Chart courtesy of StockFinder

Chart courtesy of StockFinder

Chart courtesy of StockFinder

Chart courtesy of StockFinder

Bullish Watch:

ARBA, VMW, AXE, CAT, MMM, CLF, ANV, SRCL, NAV, CTRP, YGE, CMI, CF, OVTI, OIH, AONE, EGO, CRUS, MCO, VECO, XCO, FAST, IVN, RINO, UTX, PCAR, CDE, LNCR, SFL, BEAV

Bearish Watch:

BIG, QCOM, BP, MON, MOS, GPN, CECO, DV

The Hit List post will follow shortly with my trade levels for the swing trades.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

A few days of selling pressure after Monday’s downside reversal are starting to set up for a bounce, but it isn’t here yet.  Stocks suffered once again today as they reached new lows on the week with increasing volume, and the dip buyers stayed away yet again.  Volatility is back on the rise, and the selling thus far this week has been relentless, but it’s not all doom and gloom.

The June lows are still a considerable distance away, which means that the potential higher low I’ve been looking for on this pullback may still play out.  Add to that the fact that the pullback has been rather steep, and the odds for an upside reversal begin to increase.  We’ve seen a number of steep moves in the past couple of months, all of which have led to short-term reversals.

And speaking of short-term, that’s the timeframe I’m referring to here.  The establishment of a higher high has already occurred, and the next need for the bulls is a higher low.  That may not be a single-day event, so it’s important here to continue to respect this market’s ability to decline.  All I’m watching for is a potential multi-day bounce, and beyond that, we’ll have to evaluate if and how it unfolds.

Nonetheless, it’s been a good week to be short and then in cash.  As we head into Friday, I’m looking at a few potential day trades, but not looking to commit any capital over the weekend.

I’ll see you back here with the next Bandit Broadcast on Sunday evening, enjoy your weekend!

Here is tonight’s video:

The Bandit Broadcast Video – Click to Watch!

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Video Stocks Discussed: CRUS, XCO, MED, BP, CF

Swing Trading Candidates:

NONE TONIGHT

Bullish Watch:

APKT, GOLD, AZO, ARBA, ANV, OVTI, CRUS, AAPL, XCO

Bearish Watch:

MED, BIG, BP, APC, CF, MOS, MON, GPN

The Hit List will be coming out soon with discussion on open positions and swing trade stops and targets, so be sure to watch for it.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

For an FOMC day, it sure wasn’t very lively out there.  Stocks were sluggish all day as they tested the waters both on the downside and upside, only to finish little-changed from last night’s levels.  Momentum was fleeting, and it was truly a flipper’s market today with the frequent changes of direction we saw.

And while today’s action itself wasn’t impressive, it may have some implications for prices in the days ahead.  Note that I said ‘it may have.’  What’s of interest is that we’ve pulled back from Monday’s highs, and today prices stabilized.  We didn’t finish strong, but we did finish off the lows of the day.  That might point to some short-term pullback fatigue, so tomorrow could be telling in that regard.  A turn higher from here, or even some additional stabilization, would add credibility to the possibility of a higher low resulting from this dip.  The big advance from the June lows sets up that scenario, but the bulls are going to have to go out and make it happen.

For the time being, we’re still inside the trading ranges on the NAZ, S&P 500, and RUT, so for me that means I’m waiting for more technical proof of a higher low being established before I will commit much capital for more than just quick trades.  With that said, there are several names I’m eyeing for trades tomorrow, and I’ll outline them in detail in tonight’s video.

Here is tonight’s video:

The Bandit Broadcast Video – Click to Watch!

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Video Stocks Discussed: CTRP, CF, VECO, CBOE, OVTI, BP

Swing Trading Candidates:

NONE TONIGHT

Bullish Watch:

LVS, GOLD, AZO, RBCN, ANV, FFIV, MENT, CTRP, ARUN, YGE, CF, OVTI, ARMH, MHP, EGO, CRUS, CBOE, VECO

Bearish Watch:

BP, AMG, APC, F, GPN

The Hit List will be coming out soon with discussion on open positions and swing trade stops and targets, so be sure to watch for it.

Trade Like A Bandit!

Jeff