Good evening StockBandits!

Following a very eventful series of sessions last week and Friday’s upside reversal, today’s action was far less interesting.  There was some back-and-forth action, but it was within the confines of a relatively narrow trading range compared to the recent volatility we’ve seen.  In fact for the NAZ, it was the narrowest-range day for the past 2 weeks.

Perhaps the most notable move of the day came in the final 20 minutes, as the indexes tumbled quickly ahead of the closing bell, finishing right near their lows.  That served to erase all the gains on the DJIA, and nearly all of Friday’s gains on the S&P 500 (it saved 2 points of it).  The NAZ was able to slightly outperform, but it still wasn’t immune to the selling pressure.

The next few days are likely to be pivotal sessions for this market.  With Friday’s bounce having failed, it will be particularly interesting to see if the selling pressure resumes again tomorrow.  If it does not and prices are able to stabilize, then today’s action will be the hiccup and stocks can resume their relief bounce.  At the moment, it’s still a very tough spot to be initiating new trades in either direction, as the sellers haven’t yet disappeared (tricky to get long), and yet so many stocks have broken down hard enough that many shorts feel like a chase.

This indecision in the market is keeping the charts quite sloppy, as tonight there are very few worth noting.  That’s sometimes the case in the market, and the best way to handle it is to focus on the best setups and see what triggers.  That’s my game plan heading into Tuesday anyway.

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: CSTR, TS, GS, V

Swing Trading Candidates:

NONE TONIGHT

Bullish Watch:

CSTR, PHYS, UHS, VRX, GLD, GIL

Bearish Watch:

HAR, CF, MON, MEE, SPWRA, MOS, HXM, JEC, CAM, DO, GS, PVA, SNDA, IOC, V

There will be no Hit List post this evening as I am in cash on swing trades and only looking to day trade on Tuesday.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

Friday morning brought with it an exhaustion gap to the downside after relentless selling on Thursday (and 4 of the previous 5 sessions), and along with it came a test of the May lows.  The indexes reversed sharply, closing the gap entirely and finishing positive by more than 1% across the board.

Whether it was buyers who chose to defend the lows, or shorts who sensed an excellent opportunity to cover isn’t clear.  Nor does it matter.  What happened was a validation of the lows and a big initial surge higher away from them.  That gives us a key zone to focus on going forward – at least until the May lows are taken out.

Thursday night’s DIA scenario outlined here got to within $0.02 of the $99 level I mentioned, and promptly ramped nearly 3 points higher.  That trade made my week, and I hope you were able to participate in it as well.  There were a number of other big rebounds, but my focus on Friday was the ETF’s since I knew they would participate in a rally (plus they can be traded in size).

The big question now is “was that the end of the selling?” Honestly, I don’t have an answer for that one…no crystal ball here.  What I do know is that stocks were deeply oversold enough, that paired with the high emotions, the path of least resistance suddenly shifted.  This market has been very reversal-prone in recent weeks, which means we could turn right back around and break the lows, or the bounce could continue for a little while.  Anything is possible, particularly in the current environment.

I also know that when it comes to quality patterns in the charts to trade from tonight, there are virtually none.  The downdraft last week broke every bullish and bearish chart apart.  In terms of consolidations or bases, there are next to none at the moment.  That will change, but right now they’re absent due to the frequent wide-ranging days of late.  It’s a time to keep very brief timeframes for new trades, or to stay on the sidelines until better setups emerge.  Emotions are running high, which means overreactive moves can occur at any time.

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: OIS, UHS, AIG, HOT, ITRI, BIIB

Swing Trading Candidates:

NONE TONIGHT

Bullish Watch:

CSTR, OIS, UHS, ITRI, AIG, TEX, HOT, GIL

Bearish Watch:

BIIB

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.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

Overnight weakness paved the way for a downside gap this morning, from which stocks never did recover.  Indecision was the initial response to it, but more waves of selling hit the tape into the early afternoon.  From there, the market staged a modest comeback by challenging the morning highs, but when the strength failed to persist through those levels, another harsh decline set in, bringing red right up to the closing bell.  The indexes finished right at their lows for the session with losses of more than 3% across the board.  Needless to say, it was a painful day for the bulls.

What’s so interesting here is that although the market is getting very short-term oversold and in need of a bounce, it could still continue lower with all the persistent weakness that’s present.  The buyers seem to have no interest in stocks yet, and the bears have a growing confidence.  A shift of the tide could quickly bring the bulls out to defend the May lows, and the bears could move to cover shorts, so it’s important at this juncture to stay on guard for anything.  There’s grounds for caution here on both sides of the tape.

Heading into options-expiration Friday, my game plan is pretty clear.  There are a few potential shorts which I’m considering for day trades if they trigger, but otherwise I’ll be looking to see if a market rebound kicks in.  If it does, I’ll be focused on ETF’s, as pretty much all individual stocks have been badly damaged over the past few days.  Anytime the indexes tumble more than 8% in 6 days, that’s usually going to be the case.

For those who aren’t day traders, this is a great market to remain in cash until things settle down.  Hopefully if you haven’t been short with me in recent weeks, you’ve been sitting in cash for the month of May and you’ve avoided the pain which so many are feeling in this correction.  It won’t last forever, but at the moment, there are no technical reasons to conclude it’s done.

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: CSTR, UHS, GMCR, MON, PNRA, SPY, DIA

Swing Trading Candidates:

NONE TONIGHT

Bullish Watch:

CSTR, UHS

Bearish Watch:

RDN, GMCR, CF, MON, MCO, BIIB, PNRA, WLP

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.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

Steady selling pressure this morning left the indexes looking at more losses as bounce attempts failed to gain traction.  An afternoon rebound kicked in, which did see partial success, as roughly 2/3 of the morning losses were recovered.  But in the end, it was another day in the red for each of the major averages.

The biggest event of the day was the fact that the indexes finally filled the gaps from early last week.  The NAZ pulled back 95 points of the 100-point gap on May 10th, and the S&P 500 and DJIA each completely filled their gaps.  From there, a modest bounce was seen, so that may be the support zone to keep an eye on in the days ahead.  With those gaps filled and the indexes having pulled back persistently for the past week, I’m looking to be cautious on the short side for the next couple of days.

Heading into tomorrow, there’s a distinct lack of clean patterns out there worth highlighting.  The back-and-forth nature of the market over the past couple of weeks has translated into many broken bullish patterns, and solid breakdowns in the bearish charts.  That leaves very few bounce candidates to focus on, and not many short candidates either (in case we see a continued slide).  In a few days we should see more patterns emerging, but for tomorrow I have a narrow list and will otherwise look to trade the ETF’s.

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: CSTR, UHS, ORLY, CF, ROST, APD

Swing Trading Candidates:

NONE TONIGHT

Bullish Watch:

CSTR, VCI, ORLY, IPXL, LCC, UHS

Bearish Watch:

CF, SOHU, CEPH, ROST, APC, DO, LYV, SNDA, WLP, APD

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.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

The buyers looked to be in gear this morning as an upside gap delivered additional strength to yesterday’s afternoon recovery.  It didn’t last long though, as the sellers emerged once again and the morning gap was filled.  We saw a steady series of lower highs and lower lows until the final hour when stocks merely stabilized, unable to rebound.

My intraday exit of the shorts I was carrying as swing trades was based on the late-day stability.  I discuss the individual stocks in the Hit List post tonight, but want to mention my general reasons here.  We’re in a market which has proven to be rather volatile of late, and reversals have arrived rather frequently.  The S&P 500 has just declined 4% in 4 sessions, which could certainly be followed by more weakness, but after a move of that size I start looking out for signs of fatigue.  So, in a reversal-prone market, my preference was to book the gains and stand aside, using the broad market weakness to my advantage by covering my shorts into a favorable move rather than stopping out on a bounce.

With this volatility, there are some setups out there, and that’s a good thing.  Tonight in looking through a great number of stocks, I located a few potential plays in both directions, and which I’m eyeing for both day trades and swing trades.  My aim in a market like this is to come up with plenty of if/then scenarios, and then let the market action dictate my moves.

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: GG, BVN, RDN, DO, EGO, WLP

Swing Trading Candidates:

EGO pulled back over the past few days within its uptrend, creating a well-defined trend line just overhead which I’ll be using as a pivot.  I’ll be a buyer if the $17.45 level is cleared, as that could free up prices to move higher with all the recent strength.

Chart courtesy of StockFinder

WLP has bounced in a lazy fashion over the past 2 weeks, creating a rising wedge pattern.  These are typically resolved to the downside, so I’m watching for a break of the lower rising trend line at $52.80 to trigger a short sale for me as a new leg lower begins.

Chart courtesy of StockFinder

Bullish Watch:

CSTR, SLW, ABX, EGO, GOLD, RGLD, PACR, PAAS, GG, BVN, CLDX, IPXL

Bearish Watch:

RDN, CAGC, CLF, LCAPA, CEPH, ROST, FAST, MCO, BP, RIG, DO, EL, RIMM, LYV, MBI, UAUA, CNW, WLP, ETH

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.

Trade Like A Bandit!

Jeff