Good evening StockBandits!
The indexes found strength during today’s session to push to new recovery highs, but the short-term breakout attempts ultimately failed. Stocks slid back to the flat line by the closing bell, erasing the day’s gains and leaving the major averages back beneath resistance zones which have been carved out in the past few days.
Today’s action therefore is a continuation of the rest phase which we find this market in. To see short-term resistance cleared intraday and a failure to finish above those zones iss a reminder that the close is what’s most important when watching for breakouts. The overall health of the market remains strong, but with the indexes having reached congestion zones from the spring, it’s logical to see some hesitation take place – at least initially here.
The indecision we’re seeing right now is holding some influence over my preferred trading timeframe, as follow through is simply harder to come by when in trading ranges. Last night’s day trade candidate in SHLD is a prime example, as the stock made a great move higher ($2.42) through the trigger, but the strength was temporary and the stock ultimately finished back beneath the trigger zone.
The bulls remain in the driver’s seat here, so it will be up to them whether or not this market ultimately goes higher or lower in the near term. If there’s a growing sense of concern that the spring highs won’t be cleared, we could see this pause morph into some profit-taking. However, if the dip-buyers grow impatient once again, we could see more cash come off the sidelines and propel stocks higher once again.
As a reminder, for a few weeks I’ll be utilizing the written format of the Broadcast as we’re in the process of moving and therefore without the equipment I use for recording the nightly video. My wife and I are expecting our 2nd child in December, and needed more space for the growing family. Once we’re settled and I have my new office set up, I do expect to be back to the usual video format. To those who prefer the video, thanks for your patience. To those who prefer this written format, I hope you are enjoying seeing more text! At any rate, it’s refreshing to me to be able to mix it up a bit. And of course, your input is always welcomed.
For tonight, my notes are on the charts below for index levels and potential trades I’m eyeing for Friday.
Please leave your comments and/or questions below if you have any, I always enjoy the interaction.
Swing Trading Candidates:
NONE TONIGHT
Day Trading Candidates:
These are the trades I’m eyeing for potential plays tomorrow. I will not be holding these overnight, and will wait for these levels to be crossed before entering trades.
Bullish Watch:
HOGS, FOSL, NAV, APC, RVBD, SMT, TRW, VHC, RTN, ZAGG, AGCO, CF, ATW, IDCC, BIDU, SOHU, GBX, CLI, SMOD, WDC, ISIL, CTRP, FCEA, NVTL
Bearish Watch:
MMR, IVN, KGC, PVH, MHS, OSG, LVS, JBL, MICC, JKS, LPS, EQIX, MELI, MTB, JOE, APOL, FLR, URBN, TSL, ADTN
The Hit List post will follow shortly with my trade levels for the swing trades.
Jeff, first of all, congrats on the expansion of the family. I can understand the pressure and excitement of having a bigger new home to welcome a new member to the family. (My little boy, Wesley, is now four. How time flies.)
On to business:
You have been monitoring BORN on your watch list. It’s been going up over the past few weeks (200+%, I think), but its drop of 25% today (blew thru support level on big sell volume) might end up giving us a clean “h” pattern down the road. Just a heads up.
Hey Ken!
Thank you very much, I appreciate it. We are excited for #2’s arrival (due in Dec), our first turned 3 last month and he’s a lot of fun. As you said, time certainly does fly! This transition will be 3 weeks though as our new house isn’t completed yet but we’ve already closed on the old one. So, we’re splitting time with family on both sides. Feels strange to be a homeless trader!
As for BORN, that’s definitely a big change of character after an impressive run. Good eye on the 1st ingredient for an “h” pattern, will most definitely keep an eye on it. I appreciate the heads-up. I rarely place anticipatory trades, but I’m all for anticipating these developing setups like this, so that’s a very good one to watch for Ken.
Go get ’em on Friday, and thanks again for pointing that out!