Good evening StockBandits!
Stocks got a jumpstart this morning with an upside gap, and whether it was accumulation or short-covering, we saw continuation higher into mid-day. At its best levels, the DJIA was up over 165 points, while the NAZ had added 44. The short-term oversold situation we discussed last night had given way to a bounce, but ultimately that’s all it was.
After settling into a high range, the buyers hit the pause button and the next thing they knew profit-taking had kicked in. That gave way to a series of intraday lower highs and lower lows, producing an afternoon downtrend which partially filled the morning gap. In the end, only minor gains were held.
In the after hours tonight, news has hit that ratings agency Moody’s has warned of downgrading U.S. government bonds, which in turn has sent the futures heading south. Obviously, plenty of time remains until Thursday’s opening bell, but at the moment this market is poised for another potential gap lower at tomorrow’s open. If there’s one thing that has remained constant in this market of late, it’s the fact that the market is highly sensitive to news right now. From European concerns to domestic debt issues, there is no shortage of problems and relief headlines right now to cause knee-jerk reactions. That’s making for some volatile times and sloppy charts, both of which make risk management a greater challenge.
One thing I’m encouraged by tonight is that quite a few stocks are beginning to build some bases. I’ll walk you through them in the video to add them to your watch lists and learn what I’m watching for. In terms of Thursday’s session, however, I’ll be a day trader as there simply aren’t appropriate charts at the moment for adding overnight exposure. Soon that will change, but for now capital preservation is critical and there’s no reason to force trades in a shaky environment during the middle of summer. There’s plenty of year left ahead of me to capture opportunities, and if my 11 years as a full-time trader has taught me anything, it is that those opportunities will come.
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: PLCE, SOHU, TZOO, PWRD, HFC, MPEL, LXK, CROX, REDF, MAKO, EZPW
Swing Trading Candidates:
NONE TONIGHT
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The Hit List is a separate post which contains discussion on open positions and swing trade stops and targets, so be sure to check it for further details on swing trades.
