Archives for March 2011

Good evening StockBandits!

Overseas selling pressure tied to continued nuclear meltdown concerns in Japan left the US futures deep underwater this morning ahead of the opening bell.  Stocks gapped down significantly, with the NAZ down some 82 points right after the bell.  From there, we saw a steady recovery attempt take place throughout the remainder of the session, allowing the market to chip away at the morning gap and fill more than half of it.

Today’s move constitutes a technical breakdown, as we just closed decisively beneath short-term support zones which the market had been contending with yesterday.  We’ve also set new pullback lows on both an intraday and closing basis, so this is not a bullish technical setup.  At the same time, today’s rebound from the opening lows shows that stocks had become a bit short-term oversold, which makes this a very tricky spot for embracing even a short-term bias in either direction.  As a result, I’m sticking with only short-term setups heading into tomorrow, because this market is so headline-driven right now and all those headlines are coming out of the Middle East or Japan.  That makes for a very ‘gappy’ environment, which adds considerable risk for swing trading.  I’ll take some swings as they come along, but tonight I’m all cash and intend to keep my exposure limited at best until things on either the technical or geopolitical front settle down – and they will.

Many of the bases which had been building on the charts of individual stocks were negated today with wide-ranging bars and closes outside the trading ranges.  Those mixed signals offer little of value to us as traders, so it’s imperative right now to stick with clean setups – even if they’re limited.  Those will allow us to be decisive with entries and exits, and otherwise avoid the noise that we’re seeing right now.

I’ll cover my game plan for tomorrow in the video, and as always, feel free to share your own thoughts, trade ideas, and questions down below in the comments section.

Here is tonight’s video:

The Bandit Broadcast Video – Click to Watch!

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Video Stocks Discussed: AN, SVVS, LULU, FWLT

Swing Trading Candidates:

NONE TONIGHT

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The Hit List is a separate post which contains discussion on open positions and swing trade stops and targets, so be sure to check it for further details on swing trades.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

The market offered a little something for everyone today with a downside opening gap, a quick gap fill (for the NAZ & RUT), a selloff to new lows, and a choppy grind higher from there.  In the end, the indexes finished red across the board, but not by much.

Right now, the bulls are doing their best to maintain the low ends of the wide trading ranges we’ve established in recent weeks.  There’s a sense that if we start to see more selling kick in, it could quickly accelerate as more traders identify continuation of the mild correction we’ve seen so far.  At this point, we could work our way back up into the range from this area after what may prove to be a head-fake breakdown these past few days, or we could see more profit-taking kick in, which I believe would rapidly lead to more intense selling pressure.

Regardless of which direction this market heads, there are setups building for both bullish and bearish patterns.  That means we should see more action soon in one way or another, but in the short term it’s important we allow those patterns to mature before seeking entries.  I’ll spend some time in tonight’s video outlining those setups so you can not only put them on your watch lists, but so that you can also understand what it is I’d like to see in them before I feel they’re ready for trades.

I’ll cover my game plan for tomorrow in the video, and as always, feel free to share your own thoughts, trade ideas, and questions down below in the comments section.

Here is tonight’s video:

The Bandit Broadcast Video – Click to Watch!

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Video Stocks Discussed: PLCM, RAX, LCAPA, URI, UA, HSC, CF, MON, POT, MOS, XLNX, MCHP, SWKS, SVVS, KKR, WYNN, CSC, IPI

Swing Trading Candidates:

NONE TONIGHT

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The Hit List is a separate post which contains discussion on open positions and swing trade stops and targets, so be sure to check it for further details on swing trades.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

Last week we saw continued volatility as well as a pullback as the market grappled with continued Middle East concerns.  The indexes moved toward the lower ends of their ranges, leaving traders to wonder whether recent support would hold or fold.

On Thursday night here I mentioned we were beginning to test (or in the case of the NAZ break) support, but that the possibility still loomed for a head-fake and a reversal back up into the range.  On Friday, news out of Japan with a massive earthquake and tsunami warnings in multiple countries (including the US) was plenty of incentive for the selling to continue on the heels of Thursday’s big decline.  Instead, we saw the market rebound as key levels were again respected.

That means a potential trap for bears who were looking to short support breaks in hopes of downside continuation, as they’re now caught in a situation where a bit more strength could drive them to cover their positions.  In the meantime, the bulls have a good opportunity to maintain the trading range by offering support on dips, so whatever happens, it’s sure to be an interesting battle.  It’s possible that this range persists a bit longer, particularly given how many traders are betting on an upside breakout or downside breakdown.

At this point, I’m cautious of the short side given the fact that in the last two sessions, support has been respected and currently is holding.  However, this isn’t a market that’s shown us much follow through at all in recent weeks, so I’m still looking to keep most trades short-term until the range is left behind.  Day trades have produced some excellent moves (such as OPEN on Friday moving higher by nearly $3 after triggering), so there’s still opportunity for those willing to play intraday.  I remain in cash tonight, but am eyeing one potential new swing trade, and won’t mind adding more if we start to see some better continuation from this market.

I’ll cover my game plan for tomorrow in the video, and as always, feel free to share your own thoughts, trade ideas, and questions down below in the comments section.

Here is tonight’s video:

The Bandit Broadcast Video – Click to Watch!

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Video Stocks Discussed: UA, PPO, AN, RAX

Swing Trading Candidates:

RAX has pulled back in recent weeks while remaining in an uptrend, and tonight this stock is sitting just beneath a descending trend line.  If price can clear the trend line at $37.50, it may be freed to move higher.  I’ll be going long if that level is cleared, and will keep a pretty tight stop on this one should it happen to trigger and then fail.  As with all swing trades, my stop and target levels for this trade are found on the Hit List here inside the Hideout.

Chart courtesy of TeleChart

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The Hit List is a separate post which contains discussion on open positions and swing trade stops and targets, so be sure to check it for further details on swing trades.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

The long-awaited break from the trading range we’ve been watching for finally took place today as stocks gapped lower and never recovered.  The opening prices were down enough to undercut the rising trend lines for each of the indexes, and shortly after we had broken below the lows of the past two weeks as well.  The market finished right near its lows of the day, giving us (at least initially) a decisive move out of the range.

The game isn’t over for the bulls yet though.  We’ve seen plenty of head fakes before, so bears should be aware tonight that an upside reversal could still occur, despite today’s big technical breakdown.  However, now that the period of indecision has been resolved, it’s likely that bounces going forward will get sold as more bulls recognize they’ve been trapped and a more meaningful correction may be setting in.

The DJIA gave up 12,000 with today’s weakness, with each of the averages shedding 1.8%.  The NAZ could have been worse, but for the strength in SBUX (up 10%).  Regardless, we’ve been looking for a resolution in one direction or another, and today it appears as though we’ve gotten it.

I’m pleased to have been sitting in cash, not only for the indecision of the recent trading range, but also for today’s harsh breakdown which many stocks participated in.  If you’re still long anything which has technically broken down, it’s not too late to exit.  I’ve always found it easier to book a loss and move on to better opportunities (shorts, sidelines, other buys, etc.) than to fight an uphill battle when a stock has given up important support and puts me in the position of needing a rebound.  ‘Wants’ are fine in trading, but it’s the ‘needs’ which can leave your account very vulnerable to damage.

I’ll cover my game plan for tomorrow in the video, and as always, feel free to share your own thoughts, trade ideas, and questions down below in the comments section.

Here is tonight’s video:

The Bandit Broadcast Video – Click to Watch!

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Video Stocks Discussed: OPEN, ULTA, SGI, F, GE

Swing Trading Candidates:

NONE TONIGHT

Bullish Watch:

OPEN, SKH, RPRX, NTES, SVVS, EAT, ULTA, VXZ, SGI

Bearish Watch:

KSU, MGM, MTW, TRW, F, MMI, SPW, BGC, URI, CSC, GE

The Hit List is a separate post which contains discussion on open positions and swing trade stops and targets, so be sure to check it for further details on swing trades.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

The market spent the day in a narrow range today as it respected yesterday’s high and low, posting its second consecutive inside bar on the daily charts of the indexes.  Momentum was lacking all day, making for an easy session in which to churn your account while waiting for follow through which never arrived.

There are opinions on every corner about which way this market is going to break from this narrowing consolidation (wedge), but it’s a 50-50 guess and a prediction isn’t necessary.  What’s important to actually profit from the next move will be to set up some if-then scenarios for trades on both the long and short sides, and then act according to whatever happens.  Stated otherwise, let me remind you not to get positioned for a move and then hope the market accommodates you…that isn’t trading.  The idea at this point is to let price make up its mind, and then go with it.  Trend lines are converging daily on the index charts, and after two straight inside sessions, we could see a move out of this area before the week is done.

As of yet, we’re still waiting for the break(out/down), so I’m still in cash on an overnight basis.  There are some good setups emerging nightly for trades, but I’m only looking to take day trades as long as this market continues to show short-term indecision.  I’m eager to have some swing trades going – and soon I will – but these past couple of weeks have given us zero follow through and that’s a recipe for frustration unless your timeframe is very brief for trades.

I’ll cover my game plan for tomorrow in the video, and as always, feel free to share your own thoughts, trade ideas, and questions down below in the comments section.

Here is tonight’s video:

The Bandit Broadcast Video – Click to Watch!

–

Video Stocks Discussed: BIIB, CHK, CVLT, KMX, MGM, MON

Swing Trading Candidates:

NONE TONIGHT

Bullish Watch:

MTW, UHS, ACTG, CHK, HLS, IT, FO, RPRX, HS, AN, SBGI, CVLT, KRA, LCAPA, TDC, TUP, HSIC, FCEA, BIIB, WAT, RAX, KMX, ALXN, BKD, OKE

Bearish Watch:

MGM, MON, MMI, WTI, CF, APA, IDCC, CY, FFIV, CMI, SFY

The Hit List is a separate post which contains discussion on open positions and swing trade stops and targets, so be sure to check it for further details on swing trades.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

A quick selloff from the open today failed to threaten yesterday’s lows, so in keeping with the current trading range, stocks bounced considerably.  The lack of follow through I’ve noted day after day here was again exemplified in today’s action, as Monday’s decline was perfectly erased in the S&P 500.  Such is the nature of trading ranges, as support gets bought and resistance gets sold.

That’s not to say we’ll stay here forever, because we won’t.  The moves within the range have become pretty emotional, so once we do see a break, it’s likely to catch some off guard and produce a meaningful move.  At the moment though, we’re still waiting for that break.

Tonight on the daily charts of the indexes, some wedges have become more pronounced.  That gives us well-defined trend lines to watch for both resistance and support, giving the aggressive trader some closer levels to keep an eye on for a possible exit from this range.  Conservative traders can continue to monitor the highs and lows of the past 2 weeks, which aren’t far outside the wedge trend lines.

My trading focus right now continues to have a short-term timeframe, as this reversal-prone market simply doesn’t aid multi-day moves.  Swing trading is best done with the proverbial “wind at your back,” which is to say long-sided swing trades work best in a climbing market, and short-sided swing trades work best in a declining market.  In the short-term, a trending market is absent (since we’re range-bound), and therefore one less favorable element is present for swing trading.  Once we leave the range, some good opportunities should surface, but this market just isn’t trustworthy yet for multi-day follow through in either direction.

I’ll cover my game plan for tomorrow in the video, and as always, feel free to share your own thoughts, trade ideas, and questions down below in the comments section.

Here is tonight’s video:

The Bandit Broadcast Video – Click to Watch!

–

Video Stocks Discussed: OKE, HSIC, SRZ, TDC, MGM

Swing Trading Candidates:

NONE TONIGHT

Bullish Watch:

OKE, BKD, ALXN, KMX, JNPR, SM, MCO, RAX, RCII, ROK, KSU, SWK, CSX, EMN, WAT, MERC, SKH, BIIB, CVX, FCEA, HSIC, SRZ, TTI, CTSH, TUP, TDC

Bearish Watch:

MGM, AKAM, SCCO, SFY, NVDA, CMI, TRW

The Hit List is a separate post which contains discussion on open positions and swing trade stops and targets, so be sure to check it for further details on swing trades.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

A gap up this morning was quickly sold, as the indexes surrendered their early gains to go red.  The selling intensified throughout the morning, with no buyers in sight.  The indexes undercut their intraday lows numerous times, stabilizing only briefly before doing it again.  By early afternoon, the market had moved back down toward last week’s lows, and the pace of the slide slowed considerably.  After some stabilization, an afternoon bounce lifted stocks from their lows, but only partially.

I’ve mentioned in the past few videos how when we’re caught in a trading range like this, anything is possible and frequent changes of direction are likely.  We saw that take place on Friday with a hard selloff and a late-day spike back up, and today’s downside reversal was simply another example of this market respecting the boundaries of this range.  So tonight, we’ve moved down toward the lower end of the range, but as of yet we’re still waiting for an exit from this area of indecision.

I’m looking to keep new trades short-term heading into tomorrow’s session, at least until we see a push outside the trading range.  There are some nice day trading opportunities with this recent volatility, but they are ideal for those who have some experience managing trades intraday.  If that’s not your style, then the sidelines remain a good place until we see this market make up its mind.  With the growing emotion we’re seeing, I suspect once we leave this trading range it could lead to a meaningful move.

I’ll cover my game plan for tomorrow in the video, and as always, feel free to share your own thoughts, trade ideas, and questions down below in the comments section.

Here is tonight’s video:

The Bandit Broadcast Video – Click to Watch!

–

Video Stocks Discussed: TTWO, CRZO, IDCC, IVN, POT, PLCM, JNPR, MGA, CSC, CAB

Swing Trading Candidates:

NONE TONIGHT

Bullish Watch:

MCO, JAZZ, SD, FDO, CLR, PXD, SLB, SGY, PLCM, AVL, JNPR, ALXN, ICE, MAKO, HS, BIIB, SGI, NDAQ, KV-A, EXR, TMX, RPRX, GLBL, PDS, EGY

Bearish Watch:

NTAP, APA, MGA, MGM, TCK, MOS, CMI, BWA, ARW, DLB, AIG, FCX, RYN, SOHU, CSC, GM, DE, LVS, COF, CAB, CF, MOO, COST, MAR, STT, HTZ

The Hit List is a separate post which contains discussion on open positions and swing trade stops and targets, so be sure to check it for further details on swing trades.

Trade Like A Bandit!

Jeff