Good evening StockBandits!
The sellers were out again in force today with a weak start to the session blamed on renewed concerns over Greece and Europe. It’s been the same old story for many months now, so it’s difficult to embrace that as the true culprit, particularly since the market’s been trending lower for a few weeks.
Nonetheless, the indexes took their beatings for the morning to return to short-term support zones. With the DJIA being the only exception, each of them were able to hold above the lows of the past few days, so when the market began to bounce in the afternoon, a rally took hold and quickly sent the indexes positive. The lift cooled off ahead of the bell, and in the end we saw just minor net changes.
Today’s rebound held off further damage, but by itself it wasn’t the type of day we’ll likely point to as a major turning point. The trends are still down, and the indexes remain beneath broken support levels. Volume was also nothing exceptional, and neither were the gains. The bounce had a squeeze feel to it with shorts running for cover, and overall we’ve simply rested over the past few sessions. With that in mind, I’m inclined to stay relatively passive here while the market consolidates and wait for more clarity.
I’ll run through a few of the indexes here and then share some new plays I’m eyeing.
NAZ – The NAZ remains caught between two important levels, with plenty of room here to fluctuate between them. Today’s rebound was strong, but volume wasn’t overly impressive and this index is still beneath former support. Hard to get bullish yet.
SP500 – The S&P also remains caught between two big levels at 1294 and 1335. One lower high is already in place, and the next bounce could quite easily create another.
RUT – Small caps are still struggling here despite reversing to finish positive today. 772 was a big level throughout last year, and more recently 784 has served as support. Both of those levels are overhead at the moment, making it tough to trust a bounce until those levels are reclaimed and then held.
DJIA – The DJIA tested 12300 today and bounced, which is a level I’ve mentioned here lately. This index has held that level, but the overall pattern is still far from bullish given the lack of advances and upside follow through we’ve seen in recent weeks.
Charts of Interest:
Below are some charts of interest, from market leaders to example charts:
AAPL has reached the upper end of its channel, but has more overhead just beyond this area at $576. Being a leadership stock, this is one to keep on the radar, particularly in relation to this channel.
GLD is testing major support in this area but may not be able to get far given the fact that every bounce of late has merely resulted in more selling.
NVLS moved to the lower end of its channel. This is a good example of a stock which is hard to short here, but equally difficult to buy given the recent weakness. There are many others just like this, reminding us of the importance of letting the setups build.
QCOM has been trending lower for several weeks and this little bounce could result in yet another lower high. This pattern needs more time to mature, but it appears to be a wedge in the making.
GLW has been channeling for several months and today reached the lower end of the range. This may be able to lift back up, but today’s bar was a bearish engulfing bar on very heavy volume, indicating some caution is best until we see if this level is able to hold.
CMG has lifted to challenge the upper end of this very large wedge pattern. A push through it could set it free for higher prices, but as always the broad market could serve as a headwind if it remains heavy. At some point, this may offer a well-defined play.
Watch List & Short-term Setups:
Below are stocks which are starting to set up but which are not quite ready for multi-day plays. These may provide short-term moves if the levels highlighted below are crossed, but should remain on watch a bit longer for those with multi-day to multi-week timeframes.
CERN is bumping up against a trend line here which if crossed could prompt some short-term buying. $80.50 is the level to watch, but this is only for a quick play as the upside volume in the past few days has been lacking.
SHLD is looking like it may want to turn higher here after carving out a higher low on the daily chart. It’s got room to lift if it can catch a bid through $57.30 to mark a multi-day high.
MDVN is threatening to break out here with lots of relative strength of late. A move up through $89.20 could deliver a short-term lift to new highs, so it’s one to keep on watch.
AOL has shown excellent relative strength of late and is poised for a quick pop here if it can add to today’s strength.
New Swing Trades:
These are the stocks I’m setting up for new plays. I will wait for my trigger price before entering, and all stop and target levels are provided below. For those of you who are new here, please see the Swing Trading Strategy for more details on how I manage these trades.
VECO just held its earnings gap and now sits just beneath a trend line which I’ll be using as a pivot for a swing trade on the long side. My trigger will be $34.30 for a turn back up. Details for stop and target levels are on the Trades Overview grid below.
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Trades Overview:
This list is a look at our current & potential swing trading positions. Stocks we are already in have “triggered”, while those we are considering for plays have not triggered. Click post title to view print-friendly link.
UPL stopped, VECO added
Open Position Notes:
No open positions – 100% cash.
Closed Positions:
UPL sold off steadily yesterday after triggering a buy, and continued down this morning to make a multi-day low and hit my stop, taking me out of the trade for a 4.8% loss. The stock reversed sharply in the afternoon back up, which is never fun to see. This appears to have been a quick breach of support head fake, so I’ll keep it on the radar for a possible re-entry soon if it offers a well-defined level.
Go get ’em and I’ll see you on Sunday!
Hey Jeff, My two cents goes with the videos–Sandy