Archives for June 2010

Good evening StockBandits!

A strong open this morning put stocks in rally mode, and that’s exactly what they did the rest of the day.  Buyers pushed stocks steadily higher with a very clean intraday uptrend, nudging the indexes beyond key short-term resistance levels which contained stocks on Monday.

Today’s upside breakout from the 3-week trading ranges is a positive event.  Low-level consolidation phases, no matter how wide, are downside continuation patterns within downtrends.  Today’s move negates those ranges with a solid push back above them, opening the door for additional strength in the days to come.  The jury’s still out on whether the correction has fully run its course, but at the moment, support has been found and the buyers are reappearing.

The concern with the current bounce is that it’s becoming somewhat long in the tooth, given that the S&P 500 has rallied 7% and the NAZ has ralled 7.7% since the lows of last Tuesday.  That’s serious progress in just a week’s time, which means a pullback could arrive any day now.  Once it’s here, we should get a better feel for the strength of this bounce.  If the buyers are eager to put cash to work on the next dip, then we can trade the long side with greater confidence.  If instead weakness only leads to more sharp selling pressure, then we’ll know the coast still isn’t clear.

That places added importance on the next few days, which should make it a very interesting trading environment as we head into options-expiration Friday.

By the way, swing candidates (which never triggered entries) WHR and MAN were removed tonight due to their patterns having changed.  WHR broke its downtrend line, and MAN will need to be adjusted for a possible trade in the coming days if I revisit the name.  For now, it’s still in rally mode, so I’ll keep it on watch.  New candidates are discussed in tonight’s video.

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

Here is tonight’s video:

The Bandit Broadcast Video – Click to Watch!

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Video Stocks Discussed: GIL, ANV, FFIV, MMM, DRI, DPS, HOG

Swing Trading Candidates:

DPS has held up extremely well while the market has sold off the past couple months, and now this one looks ready to start a new leg higher.  First it needs to clear the trend line at $38.10, so that’s the buy point I’ll be using for an entry if and when it’s cleared.

Chart courtesy of StockFinder

HOG remains weak since turning lower in April, and this bearish rising wedge may hold some potential for a short sale.  Today this one didn’t participate much, which is another reason I like the prospects here for a trade.  I’ll be looking to short this one if the lower trend line gets broken to confirm this wedge pattern at $27.25.

Chart courtesy of StockFinder

Bullish Watch:

AKAM, GOLD, AZO, DTV, VMW, GIL, GLD, FRG, ANV, QCOR, DPS, MENT, FFIV, SRCL, WLP

Bearish Watch:

HOG, JLL, MDC, AGP, AMG, LAMR, MMM, DRI, SF

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 minor gap up this morning kicked off the week on a positive note, and the buyers continued to emerge for a while to take the indexes right to key resistance zones highlighted here last night.  Those levels proved to be formidable resistance once again, and stocks backed away for the remainder of the day.  By the close, stocks were at their worst levels of the day after having given up their gains.

The current environment remains one in which upside follow through is very difficult to find.  We’ve seen quite a bit of back-and-forth price action, and the frequent reversals are playing a key role in the lack of trust among traders when rallies begin to stall out.  When so many are eager to sell at the first sign of weakness, it makes it tough to expect much else.  Those who are long have felt enough pain that they’re quick to raise cash when in doubt, and of course the bears are anxious to remount shorts into rallies, combining for plenty of selling pressure.

So, the trading ranges are intact for another day, and that’s the most important thing to take from today’s action.  Key levels were validated again today, so we’ll continue to focus on them heading into tomorrow’s session.

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

Here is tonight’s video:

The Bandit Broadcast Video – Click to Watch!

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Video Stocks Discussed: NBR, ADSK, SDS, QID, FAZ, NSC, RIG, DLB

Swing Trading Candidates:

WHR has bounced in recent days, but along the way the finishes have been weak and the volume hasn’t been impressive.  This stock is already in a downtrend, and appears to be stalling out here after this bounce.  I’m eyeing the lower rising trend line at $97.70 for a break to signal a short sale.

Chart courtesy of StockFinder

MAN is starting to stall out after a bounce from the recent lows, and could easily turn down again.  A break of the rising trend line at $43.50 will be my signal to short this one.

Chart courtesy of StockFinder

Bullish Watch:

GOLD, VMW, IT, GIL, UNG, SDS, QID, HSY, NTRI, CAL, RBCN, VRX, FAZ, GLD

Bearish Watch:

VMC, BIIB, DO, JOE, RL, WHR, FSLR, MDC, HD, CSTR, NBL, NUE, GNK, TEX, DISCA, NSC, DLB, NBR, AMG, LAMR, FTI, MAN, ROK, QCOM, VFC, MMM, CSCO, ADSK, RIG, ESI, ATI, CLF

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 climbed carefully from a shaky start on Friday to settle into a trading range for the bulk of the session.  In the final hour of the day, stocks caught a bid to take them to their best levels of the day, capping off yet another very interesting week of trading.

Reversals have quickly become the norm for this market, and last week was no exception.  With the early portion of the week picking up where the previous one left off, we saw some heavy selling pressure on Monday.  The indexes were able to find buyers in the support zone near the late-May lows on Tuesday, and from there turned higher with a big rally on Thursday and some late follow-through on Friday to go out at their highs of the week.

There’s plenty of day to day movement and overnight movement lately, but overall the market has settled into a wide and sloppy trading range in recent weeks.  Traders on both sides of the tape seem equally distrustful of the moves, and rightfully so with all these reversals, which is also prompting rapid shifts of direction once momentum stalls out.  The buyers are aware of just how difficult it’s been to see lasting upside, and the shorts are mindful of the steep spikes which tend to come within market corrections.

The week ahead should be interesting as well, so we need to bring our best.  This isn’t a time for bold predictions or getting glued to an opinion, because in trading ranges, anything’s possible.  In the bigger picture, the market remains in a correction phase, and no technical proof has yet emerged to dispute that.  So, cash is nice to have on hand, as is a flexible opinion, because this market is likely to have a few more tricks up its sleeve before things really smooth out.

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

Here is tonight’s video:

The Bandit Broadcast Video – Click to Watch!

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Video Stocks Discussed: GOLD, UNG, MED, FCX, RL, FLS, MHK, HD, AZO, XEC, SM, HAIN, JLL, BIG

Swing Trading Candidates:

NONE TONIGHT

Bullish Watch:

AKAM, NFLX, DECK, LVS, APKT, GOLD, RGLD, AZO, NTAP, DTV, ARBA, VMW, IT, XEC, GIL, UNG, PANL, AMR, LOOP, VRSN, SM, GSIC, HAIN

Bearish Watch:

BIIB, VMC, MED, JOE, HOG, FCX, RL, JLL, VNO, PCP, XHB, AXE, WHR, FLS, GXDX, BIG, MHK, FSLR, MDC, CAT, HD

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 poor finish yesterday pointed to possible downside follow through today as the indexes struggled to hold support zones, and particularly given all the big moves (mostly to the downside) we’ve seen in recent weeks on Thursday.  However, today we saw a big opening gap to the upside, which was built upon as the day progressed, leaving the indexes with 2-3% gains by the end of the session.

If this market is anything right now, it’s fickle!  Reversals have been the norm, both on an intraday basis, and on an overnight basis.  That’s keeping traders of all styles and timeframes very much on our toes, as literally anything is possible right now.

Lately I’ve mentioned a number of times that this market could rip either way on any given day, due to the persistent weakness we’ve seen (promoting additional downside), and due to the sidelined bulls and shorts needing to cover (promoting upside spikes like we saw today).  That’s still the case, although today’s bounce leaves something to be desired for the bulls.

The lack of strong volume accompanying today’s bounce makes it somewhat suspect, so for the moment all we know is that a bounce is taking place from support within a short-term (but very wide) trading range.  Needless to say, it’s a time where the sidelines aren’t a bad place to be, and quick flips are about the only kinds of trades to be making until some clearer signals occur such as some lasting strength or another breakdown.

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

Here is tonight’s video:

The Bandit Broadcast Video – Click to Watch!

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Video Stocks Discussed: XEC, PANL, HAIN, VMW, APOL

Swing Trading Candidates:

NONE TONIGHT

Bullish Watch:

TIE, CRM, SM, GSIC, QCOR, VMW, XEC, AGP, PANL, LOOP, VRSN, HAIN

Bearish Watch:

VMC, AXE, MSFT, SHLD, LPS, BIG, ESI, APOL, CREE, URS

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 a while today, it looked as though yesterday’s afternoon bounce might evolve into something more meaningful as the indexes rallied well into positive territory by mid-day.  However, a pullback from there was unable to find buyers, and ultimately morphed into an all-out reversal.  The market gave back all its gains, finishing negative on the session after a weak effort on the part of the bulls.

Failure to find upside follow through is nothing new for this market, as that’s been the norm for a number of weeks now.  What’s interesting though is that the NAZ and S&P 500 in particular each reclaimed short-term support levels temporarily today, but finished back below them.  That confirms those levels yet again, this time from below, so we’ll continue to monitor them in the days ahead.

As for what’s next for this market, the fact is that anything’s possible.  Conditions are certainly weak, so we could see another leg lower from here now that support has been broken and tested (with a failure).  However, we must also respect the potential for a bounce to come along, as corrections do have rebound phases that don’t have to announce their arrival.  So, this is still a tricky spot where flexibility is key and timeframes should be kept short.

All these frequent reversals are keeping the charts sloppy right now, which places a premium on high-quality patterns.  Stick with those, and it’ll remove a lot of noise which so many other stocks are dealing with right now.  My plan for tomorrow is to stick with day trades, and I’m 100% cash tonight after closing out the last of my recent swing trades today (details in the Hit List post).

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

Here is tonight’s video:

The Bandit Broadcast Video – Click to Watch!

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Video Stocks Discussed: CSX, MA, ETN, QCOM, CREE

Swing Trading Candidates:

NONE TONIGHT

Bullish Watch:

DECK, SWN, NFLX, AGP

Bearish Watch:

MON, MOS, BEN, MEE, GPN, DRQ, CSX, MA, ETN, APOL, QCOM, CREE, ONXX

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!

Morning weakness led to a test of the May lows in each of the major averages as key levels recently highlighted here were challenged.  The buyers stepped in to offer support, at least temporarily, creating an upside reversal with some afternoon strength which lifted the market well off its worst levels of the day.  By the closing bell, the DJIA had chalked up a triple-digit advance, although the NAZ remained in the red.

It’s too early at this point to declare a turning point for this market, because one day held at support does not a bull market make.  What we do know is that the market had declined considerably from Thursday’s high of last week, and it was likely due for a bounce.  With key short-term support levels having been approached, it was a logical spot for bargain-hunters as well as shorts who needed to cover to step in.  Whether we see any lasting follow through from here remains to be seen, but for the time being, support is being respected.

With this market so capable of making a big move in either direction from here, and with so few high-quality chart patterns available tonight, my game plan for Wednesday is to keep short timeframes for new trades.  This is definitely a market for the nimble, so tight stops and quick profits are the name of the game for those venturing into the fray.  Maintain high levels of cash here, and wait to see if this market is able to build on the bounce which started this afternoon.  If a lasting rally is to take place, we’ll see a pullback after the initial bounce which will offer much better entries in terms of defined risk.

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

Here is tonight’s video:

The Bandit Broadcast Video – Click to Watch!

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Video Stocks Discussed: TD, SMH, CSX, OII, QCOR, UNG, AMR, DECK, SWN, XCO, MA

Swing Trading Candidates:

NONE TONIGHT

Bullish Watch:

QCOR, UNG, NGD, XCO, AMR, ALK, HSY, CXO, DECK, SWN, CRK

Bearish Watch:

GPN, DPZ, BIG, DRQ, GMCR, MA

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