Good evening StockBandits!
The market flirted with positive territory a couple of times this morning, gapping slightly higher to begin the day and soon after bouncing to reach new highs on the session, only to reverse hard and chalk up another significant decline. For the NAZ, it was a 2% loss, while the S&P 500 and DJIA each gave up slightly more than 1%. Nonetheless, support was taken out in each index, reminding all that we’re still in a corrective phase.
I’ve mentioned a number of times here lately that upside follow through has been virtually nonexistent, as well as upside volume. The inability of this market to put together even a decent bounce that lasts longer than a day has been the biggest warning flag of late, and it has kept me holding some short-sided exposure. Hopefully even if you don’t trade the short side, you’ve long since raised cash and avoided the pain which so many are feeling.
At some point, the tide will shift again and stocks will rally. Until that happens, the market remains in corrective mode and extreme caution should be exercised when considering trades on the long side. We’ve seen a significant 2-day decline, and while more weakness could arrive tomorrow, it’s an equally important time to stay careful with new short sales. Relief bounces have been sudden when they have arrived in recent weeks, so timing remains important even when trading in the direction of the prevailing downtrend.
For tomorrow, there sure aren’t many setups out there worth noting after a big rally last Thursday and then a steep selloff in the 2 sessions since. I’m eyeing some trades, but keeping a pretty focused list until more quality bases emerge in the charts.
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: NGD, PBR, GPN, GMCR
Swing Trading Candidates:
NONE TONIGHT
Bullish Watch:
NGD, EGO, THOR
Bearish Watch:
OII, MON, DWA, MAC, OIH, PBR, LPS, ATW, SLB, DO, MHP, FTI, SII, TRLG, NE, RIG, BIG, GPN, DPZ, NOV, DRQ, HES, GMCR, APC
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.
