Good evening StockBandits!
An attempt at a breakout today was met with no follow through, as the S&P 500 briefly cleared the highs at 1113 only to quickly fall back under that level. The DJIA made a new intraday recovery high as well, pushing north of the 10,500 zone, but it too was unable to build on that strength and ultimately finished slightly negative on the day.
We’ve been in an environment for most of the year in which every bit of weakness has been bought, leaving no doubt as to the resolve of the bulls. But on a day like this when breakout attempts fail to gather traction, it raises the question of whether or not the market is becoming tired. After all, who could blame it after such a sizeable run?
I’m far from being a bear at this point (although I will still trade the short side when bearish setups come along), but I am reminded today of the importance of the close when it comes to breakouts. Intraday fluctuations which take prices outside their recent ranges are worth noting, yes, but in no way do they carry the same significance as a close beyond the boundaries. Today we failed to close outside of the recent boundaries, so the range persists for another day (at least).
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: JEC, FWLT, PCP, H, TXT, PCU, ACI, AIG, ILMN
Swing Trading Candidates:
ILMN has exhibited considerable weakness lately, and in the past few days it has bounced rather sharply. The bounce has created a V-shaped move, as well as a steep rising trend line which price is now starting to lean on. A move down through the trend line will be the next technical sell point, so I’m watching this one for a play on the short side if and when it undercuts $28.85.
Bullish Watch:
ACL, NARA, HNT, LFT, FDX, LEAP, TXT, CLF, PCP, NTAP, WLL, H, CYD, PCU, XME
Bearish Watch:
ESV, ILMN, WFMI, BEN, AAPL, ERTS, GMCR, BAC, WYNN, PEET, AIG, JEC, MDR, HAL, ACI, CTV, CRK, VRX, SM, APA, FWLT, LZ
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.
