Good evening StockBandits!
Teflon was developed by DuPont as a non-stick surface. In the case of a personality – or this market – it describes the way in which criticism fails to stick. The bears can point to the overbought rally or they can discuss geopolitical headwinds or economic concerns, and the media can attempt to spook bystanders, but none of it has been able to stick. The tape has been made of Teflon and so far nothing has been able to keep stocks down for more than a day. Every pullback lately seems like a one-and-done event and the S&P hasn’t registered back-to-back declines in over a month.
Today we saw the latest installment of the series as headlines surfaced that Putin had withdrawn troops from Ukraine now that this “military exercise” is over. Political talk aside (as this is not the place for it and that is not my interest anyway), it gave the bulls a shot in the arm and the market quickly recovered what had been lost on Monday – and quite a bit more. It turned into a massive spike higher with runaway buying which created a trend day to the upside. The NAZ, S&P and RUT each painted new bull market highs, with the latter up more than 3% at its best levels of the day.
It’s a little funny just how aggressive the dip-buying has become, but so be it. This is the market right now, and we have to find ways to navigate it. Shorts are in a world of hurt, the bulls are running with momentum, and it seems that bad news won’t be the culprit for a meaningful pullback once it happens. Apparently the last few bears will have to become bulls before prices will finally retreat. Stay on your toes because although it has been persistent and is present now, perpetual strength is not a given.
Let’s get to the charts.
NAZ – The NAZ has seen a 9.8% lift from the February low of just under 4 weeks ago. Today it cleared the prior high from last Friday to continue the run, leaving it less than 800 points from its all-time high from 2000. This index remains very short-term extended, but the bulls have momentum and don’t seem ready to slow down yet.
SP500 – The S&P has seen an 8% lift from the low of last month and today reached a new all-time high. This puts it back above 1850 with a little breathing room to spare.
RUT – The RUT has been the big runner during this lift from the Feb. low with a lift of 12%. Today’s spike of over 32 points on the day made it the leader for the session as well, putting it at a new all-time high.
DJIA – The DJIA made a new recovery high today with an impressive 227-point rally. That leaves it less than 200 points from its all-time high set back in December, which would be easily cleared with another session like we saw today.
Notable Names:
JCP lifted ahead of earnings a few days ago, then saw a breakaway gap to the upside last Wednesday. It found follow through into this morning but approached a prior zone it has respected a few times and subsequently backed away. The weak finish suggests some backing and filling is in order, but this has been an impressive rebound for a stock which was just a few weeks ago sub-$5.
MGA is extended here after a big ramp. Many traders see charts like this and want to chase the strength, but more often would do better to wait for some rest or basing action to digest the run instead of being late to the party.
DPZ is another one that has been screaming higher with virtually no rest, save for a 2-day decline Feb 18-19. This is another chart where there has been persistent strength, but an entry here begs the question of where to exit should the inevitable pullback finally arrive? My preference is to wait for a base or some consolidation to arrive, which would answer that question for me.
PAGP is on my radar tonight but not yet being set up for a trade. I would like to see price edge closer to resistance, so it may soon offer a breakout play.
YPF is trying to turn back up here but volume isn’t strong enough yet to warrant a swing. Also, the risk/reward for a swing doesn’t carry much appeal. However, the stock has a little room for a lift here, so I do like it for a single-day play if it can clear the trend line at $26.90.
PAAS is stabilizing here and has finished at the exact same price for the past 3 sessions. A turn up through $14.30 could quickly gather some momentum, so I like it for a single-day play for Wednesday if that level gets crossed.
BBBY was listed here last night but didn’t quite trigger today. The same setup is in effect, and I’m still looking for a low-level breakout through short-term resistance. Because I think the January gap will not soon fill and am expecting price to initially respect it, all I’m interested in here is a single-day play.
DO is acting heavy and a break below $46.50 could bring a quick test of the recent low. This looks best to me for a single-day play since that test is all I’m looking for.
New Swing Trade Candidates:
No new swing candidates tonight, waiting for better risk/reward setups to emerge.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
