Archives for July 2011

Good evening StockBandits!

The DJIA suffered its worst week on over a year last week, and that pretty much told the story for the overall price action in the other indexes.  The NAZ shed 100 points and the S&P 500 lost almost 4% as traders fled from stocks for the safety of the sidelines.

Despite the give-back of the market, the indexes still each sit at levels which are above their June lows.  Zooming out even further on the charts reveals that this market remains range-bound in a multi-month trading range.  That’s a huge reminder to us as traders that while the sellers had the ball last week, it’s still a bit of a game-time decision when it comes to which way the market is headed.  Anything’s possible within trading ranges, and reversals tend to be more sudden and frequent whenever that’s the case, and right now that’s where we find ourselves.

Most individual stocks have seen quick ramps higher and sharp pullbacks, all in just a few weeks’ time.  That’s keeping their charts rather sloppy as a result, leaving very few quality bases to trade from.  That makes this really a daytrader’s market, which is fine for those willing to stick solely with cash-flow types of trades.  For others who prefer a multi-day timeframe, there’s little to go with right now given the messy charts, wide-ranging bars, and frequent overnight gaps we’ve been seeing.

We’re still in the middle of earnings season so it’s very important to check the earnings calendars daily for any multi-day trade. I like to check both EarningsWhispers and Yahoo Finance. No matter where you look, just be sure to look and compare multiple sites to help confirm reporting dates for any stock you’re considering holding overnight.

** One other note is that this week I’ll be on vacation so there will be no Broadcasts or site updates. I’ve allowed up to 4 weeks of vacation per year, but in 7 years I’ve never come even close to taking it all. In 2010 I took 1 week off, so this is overdue! I’ll return on Monday, August 8th. With the market still range-bound, the continued indecision we’re seeing, the summertime price action, and earnings season, I think it’ll be an ideal time to step away and let the charts do some rebuilding. Plus, it’s good to periodically clear the head and step away from the screens for more than a day or two and then return refreshed and ready to go again. Thanks for understanding!

In tonight’s video, I’m going to do something a little different since I’m not planning to trade on Monday (or this entire week since I’m on vacation).  Instead of going through my game plan, I’ll cover the stocks on my watchlist in the video so you see the best charts I’ve found and what I’m watching as some of them continue to work on their respective patterns.

Here is tonight’s video:

The Bandit Broadcast Video – Click to Watch!

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Video Stocks Discussed: SOHU, WLT, MRX, ARIA, RENN, PII, ALXN, CE, RVBD, SLAB, ADTN, RIMM

Swing Trading Candidates:

NONE TONIGHT – 100% Cash

[table “96” not found /]

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 major averages emerged from an indecisive morning to rally nicely into mid-day, but conviction was lacking and it left the buyers uncertain yet again.  That evolved into afternoon selling, which completely erased the gains from earlier in the session.  In the end, the intraday rainbow-shaped price action left 3 of the 4 indexes in the red (only the NAZ was incrementally positive). There wasn’t much technical damage done though, which leaves the market not far from where it was last night, although the DJIA did undercut the mid-July low.

At this point, we’re still seeing the market grapple with uncertainty – something it absolutely hates.  The debt ceiling issue remains front and center, with a slew of individual companies still yet to report earnings for last quarter.  Combined with the fact that we’re still caught in a wide trading range, there’s just not much conviction here on the part of buyers or sellers.  The good news is that at some point we’ll see the debt ceiling issue resolved one way or another, removing that element of uncertainty, plus we’ll see earnings season come to pass.  That’ll remove a bit of the fog hanging over this market, and could lead to some cleaner moves in the weeks to come.

The key is not to force trades when there’s so little to act on for anything longer than a few hours at a time.  Conviction brings continuation in the overall market, which is the tailwind individual stocks need in order to create good clean moves.  We don’t have that right now, which makes it a bit more tricky to count on lasting moves from most stocks.  So, I’ll keep taking the cash-flow trades this market is offering and otherwise continue to monitor my watch lists as setups and bases are built.

We’re still in the middle of earnings season so it’s very important to check the earnings calendars daily for any multi-day trade. I like to check both EarningsWhispers and Yahoo Finance. No matter where you look, just be sure to look and compare multiple sites to help confirm reporting dates for any stock you’re considering holding overnight.

** One other note is that next week I’ll be on vacation so there will be no Broadcasts or site updates.  I’ve allowed up to 4 weeks of vacation per year, but in 7 years I’ve never come even close to taking it all.  In 2010 I took 1 week off, so this is overdue!  I’ll have a weekend update for Monday’s trading session, then will take a week off and return on Monday, August 8th.  With the market still range-bound, the continued indecision we’re seeing, the summertime price action, and earnings season, I think it’ll be an ideal time to step away and let the charts do some rebuilding.  Plus, it’s good to periodically clear the head and step away from the screens for more than a day or two and then return refreshed and ready to go again.  Thanks for understanding!

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: SINA, MOS, MPEL, IPI, PDC, RENN, FIO, GHL, COF, RIMM

Swing Trading Candidates:

NONE TONIGHT

[table “95” not found /]

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!

Stocks got slammed today as traders had little else to focus on aside from disappointing economic data and the ever-present debt ceiling debate in Washington.  As the August 2nd deadline approaches, the price action shows a clear picture of buyers being replaced with short-sellers and profit-takers.

Although we’re likely to see a quick rebound in the market once this uncertainty passes, the fact of the matter is that right now it still looms large and the market clearly doesn’t like it.  Trying to trade the short side aggressively for any timeframe outside a few minutes or hours opens the door for increased headline risk, as a resolution to this mess will eventually deliver a sharp bounce.  At the same time, attempting to buy into the weakness could result in simply entering too soon, as another couple of days like today would require a sizeable rally just to return to current levels.

To say the least, it’s a mess out there and there’s little to do until it’s resolved, other than scalping some intraday moves.  The biggest factor right now is patience for navigating this market.  Rather than forcing entries in an attempt to be involved in some way, the best traders are willing to sit on their hands and let the setups build.  We’re still caught in a multi-month trading range, we’re facing a volatile, headline-sensitive environment right now, and there are very few setups worth noting.

My plan is to let this corrective price action run its course, then reassess where the market stands.  Should it find support at a level above the June lows, that would mark a potential higher low and offer up some potential for a push back up toward the upper portion of the range.  However, the jury is still out on that as stocks continue their slide from last week’s highs.

I’m still in cash tonight, and quite content about it.  Getting stopped out of my long swings a few days ago by aggressively raising stops allowed me to lock in some solid gains and avoid all this pain.  I’ll continue to monitor my watch lists for potential swings, but at the moment the market is still so fixated on the news flow that it’s not allowing stocks to create the consolidations and basing action needed for new swing setups.

This will at some point come to pass, but for the time being we have to respect it and I think cash is a great place to be at the moment given all the uncertainty this market is facing.  Stay patient out there, because we will see some good opportunities emerge from all of this.

Tonight I’m going with the written format as I know some of you enjoy being able to skim the setups. My notes and trade levels are provided on the charts below.

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

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Swing Trading Candidates:

NONE TONIGHT

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. Please see the Day Trading Strategy for more details on how I manage these trades.

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

[table “94” not found /]

The Hit List will not be posted tonight as I am 100% cash overnight and there are no new swing trades for Tuesday. The Hit List typically contains stop and target levels for my swing trades.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

Stocks zig-zagged in a pretty narrow range today as the market put in some rest with minor pullbacks across the board.  Last week’s highs still aren’t far away, although the buyers are taking a breather and allowing some new bases to build on the daily charts of both the indexes and individual stocks.

The biggest reasons for this are the continued uncertainty surrounding Washington and the debt ceiling, as well as the fact we’re right in the thick of earnings season.  With the market lingering not far from its highs of the year, the buyers simply don’t yet have a big urgency to commit more capital in such a news-sensitive environment.  Once some of the fog clears out, the indexes are poised for an important intermediate-term breakout – provided the bulls want it bad enough to produce it.

With all the unknowns and with it being summertime, we as traders simply have the luxury here of picking and choosing our spots or simply staying sidelined whenever the waters get choppy.  Instead of growing frustrated with these kinds of things, it’s important that we remember our primary goal of preserving capital and our secondary goal of making money.  When setups aren’t yet plentiful and when the market is doing its best to put in some healthy rest, the best course of action is to allow the patterns to mature or simply stick with an abbreviated timeframe for new trades.

I’m in cash tonight, but maintaining my watch lists, drawing and re-drawing trend lines as needed while waiting for setups to build.  They will arrive in due time, but forcing them has historically proven painful in my own trading, so there’s no reason to just dive into trades for the sake of being active.  The major indexes aren’t showing great conviction at the moment, and instead are respecting recent highs while they churn beneath those levels.

Be sure to check out today’s blog post on the CROX swing trade.  I reviewed how the stock was setting up, how it morphed from a day trade candidate into a swing candidate, and of course how I managed the trade along the way.  It offered some unique lessons, so I wanted to point them out.

Tonight I’m going with the written format as I know some of you enjoy being able to skim the setups. My notes and trade levels are provided on the charts below.

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

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Swing Trading Candidates:

NONE TONIGHT

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. Please see the Day Trading Strategy for more details on how I manage these trades.

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

[table “93” not found /]

The Hit List will not be posted tonight as I am 100% cash overnight and there are no new swing trades for Tuesday. The Hit List typically contains stop and target levels for my swing trades.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

Default fears tied to the unresolved debt ceiling issue sent stocks to lower levels today as an opening gap to the downside reflected the market’s dissatisfaction with the weekend developments.  Friday evening’s headlines set the tone for a weak start today, and the situation simply didn’t improve over the weekend.

It’s interesting how these kinds of events can occur when trading range boundaries are being approached, and it’s one more reason to play things close to the vest until we truly see a technical exit from this range.  We’ve rallied nicely off the June lows, but that left the indexes at the upper ends of their ranges, making them ripe for some profit-taking when the news flow turns negative and uncertainty creeps back in.  Traders have a mindset of “sell now and ask questions later.”

We did, however, see stocks rally off their morning lows, and the NAZ actually went positive by mid-day.  The dip-buying didn’t persist though, and we saw stocks drift back down in the afternoon.

Currently, the market is still somewhat antsy about how this debt ceiling stuff will get resolved, and whether Washington will make a deal before next week’s borrowing deadline of August 2nd.  All politics aside, this market doesn’t seem to be pricing in a U.S. default.  It has seen considerable uncertainty for a while now and remains not far from 52-week highs.  That’s certainly some fuel for the bullish case, but another look at the charts shows we’re still caught inside a range and therefore the buyers will still have to capitalize on that if the news flow turns positive.

While we’re in the range and with some important levels looming not far overhead, it’s a time to stay vigilant and keep positions on a short leash.  I aggressively raised stops over the weekend, and was taken out of all my overnight positions today (3 of them on weakness, 1 at Target 2).  That puts me back to cash for the time being, which isn’t a bad thing to have some solid profits booked.  I’ll of course keep my eyes open for setups which have potential as plays in the coming days, but won’t be pressing the matter with the market so sensitive to the headlines right now.

Tonight I’m going with the written format as I know some of you enjoy being able to skim the setups. My notes and trade levels are provided on the charts below.

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

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Swing Trading Candidates:

NONE TONIGHT

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. Please see the Day Trading Strategy for more details on how I manage these trades.

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

[table “92” not found /]

The Hit List will not be posted tonight as I am 100% cash overnight and there are no new swing trades for Tuesday. The Hit List typically contains stop and target levels for my swing trades.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

Last week proved important for the bulls, in a couple of ways.  On a technical basis, we saw weakness on Monday mark a new pullback low from the early-July highs, only to see a late rebound erase some of those losses.  Then from Tuesday through Friday, stocks continued higher to help confirm the higher-low scenario we’ve been watching over the past couple of weeks.

On a psychological basis, the bulls know they have company after a move like this.  The rally off the June low was very momentum-based and included high emotions and ample short-covering.  That made it hard to determine just how much was actual accumulation, but now that we’ve seen the first dip get bought and some follow through, it’s a big boost for the bulls.  That could quite easily create additional confidence on subsequent pullbacks now that the May and June lows look likely to hold for at least awhile.

At this point, the indexes are facing some important tests on the upside in the near future if this strength continues.  We have the aforementioned early-July highs, followed by the May 2nd highs as potential resistance zones.  A breakout which is able to hold above those levels would open the door for considerable upside in this market between now and the end of the year, so it’s got explosive potential.  If instead those highs are able to hold, then there will be some short-selling opportunities back down toward lower levels within this very wide multi-month trading range.  My hunch is that this market is headed higher, as it has effectively shrugged off a variety of negative events and plenty of uncertainty in recent months.  Should the news flow actually turn positive, this big range could serve as a launch pad for another bull phase to kick in on the bigger picture.

We’re getting into earnings season and it’s time again for a reminder to check the earnings calendars daily for any multi-day trade.  I like to check both EarningsWhispers and Yahoo Finance. No matter where you look, just be sure to look and compare multiple sites to help confirm reporting dates.

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: HMY, CDE, SCCO, RGLD, SVM, SOHU, NTES, SLW, EXK, GG, RTI

Swing Trading Candidates:

NONE TONIGHT

[table “91” not found /]

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 night I noted here that the minor pullbacks we had seen in Wednesday’s session appeared to merely be a day of rest for the indexes.  I pointed out the lack of importance for immediate follow through on the heels of Tuesday’s sharp rally, as it had given the market a bit of breathing room and allowed the bulls to catch their breath.

That opened the door for continuation to happen, and today we got it.  Each of the indexes rallied nicely with opening-hour surges higher, pushing further away from their July lows.  The DJIA challenged its July high, while the others gained ground for possible tests in the days ahead.

Perhaps the best aspect of today’s price action was the volume which accompanied it.  Not only was it above-average, but by comparison to yesterday’s pullback volume it confirmed what price has been telling us lately – that there’s more participation on the buy side.

Stocks continue to come under accumulation, despite the news flow and remaining uncertainty.  Earnings season may still hold some surprises, but all in all, the market has taken all the recent uncertainty in stride and has maintained the wide multi-month trading range.  As we edge back toward the upper end of that range and approach short-term resistance zones, we could see some bumps, but overall the buyers are still in control since reclaiming the steering wheel on Tuesday.

Tomorrow is a summer Friday, and once again we could see volume sag as traders head out to tend to other things or begin their weekend early.  The setups in which I’m most interested for tomorrow’s session are day trades. I’m holding 4 swing positions on the long side tonight, and don’t mind adding more when and if the right setups and risk/reward profiles come along. For tomorrow, I plan to focus on these names as day trades with 1% stops from entry and look to ride intraday momentum for 2-4% gains if they trigger entries.

Tonight I’m going with the written format as I know some of you enjoy being able to skim the setups. As noted recently, I will be utilizing more written newsletters to compliment the videos. My notes and trade levels are provided on the charts below.

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

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Swing Trading Candidates:

NONE TONIGHT

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. Please see the Day Trading Strategy for more details on how I manage these trades.

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

[table “90” not found /]

The Hit List will not be posted tonight as I am 100% cash overnight and there are no new swing trades for Tuesday. The Hit List typically contains stop and target levels for my swing trades.

Trade Like A Bandit!

Jeff