Good evening StockBandits!
With a pair of decisive moves in both directions having taken place in recent weeks, we saw what may be the start of yet another decisive move take place on Friday. The action on Wednesday and Thursday was rather quiet, allowing the market to put in some needed rest after a big move up from the July 1st low. So when the buyers failed to show up on Friday after some early slippage, the selling accelerated and the indexes gave up 3%.
This market has been very streaky of late, and that could continue. Combine that with the fact that Friday’s selling never did stop, and there’s ample reason for caution as we head into Monday. The wild card is the impact of options expiration from Friday, so that may impact tomorrow’s trading as well. Nonetheless, lower highs are currently in place for the indexes, and that means we should be in no big hurry to step out in front of this decline until signs emerge that it’s ending.
Speaking of this decline, the bulls are actually facing yet another good opportunity with this pullback. That may sound ironic, but the truth is that the magnitude of the bounce from the July low opens the door for this dip to result in a higher low. When and where that happens, as well as IF it happens, are yet to be seen. It’s just one scenario to consider as a possibility, because this correction will not last forever. I’m not the least bit anxious to buy, but if we do see signs of stability begin to emerge before the July lows are tested, one can be sure the bargain-hunters will spot a low-risk setup for putting cash to work, which could in turn motivate shorts to cover, and next thing we know a low will have been put in. Again, this is no prediction, just a possibility to keep in the back of our minds as yet another pullback gets underway.
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!
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Video Stocks Discussed: APA, NYX, ABV, WY, SHLD, RIG, CF, LVS
Swing Trading Candidates:
NONE TONIGHT
Bullish Watch:
PPO, IOC, VRX, SOL, ABV, STP, WY, TSL
Bearish Watch:
SHLD, ESI, DRQ, RIG, CLF, F, LULU, RGLD, ALK, LVS, RS, WMS, SLW, TS, RTP, CREE, GIL, RCL, CTRP, APA, AKAM, CF, NYX, CSTR
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.
