Good evening StockBandits!

Last week we saw the SPY reach a big milestone with a streak of 14 consecutive positive closes, but as with all streaks, that came to an end.  Thursday’s downside was a mere formality, whereas Friday’s selling was more of the legitimate variety.  Along with option expiration came the most downside pressure we’ve seen in nearly a month, as the recent straight-up move finally ran into air thin enough that even short-covering didn’t take place.

So does Friday’s turn lower on big volume (which, by the way was largely options-related) mean that the end of the run has finally arrived?  Does it mean that we just short aggressively and wait for the profits to roll in?  Well, I don’t think it’s going to be that simple.  It does point to some short-term exhaustion, which means in the next couple of days the market appears poised for at least a rest, and possibly some further corrective price action.  After the move we’ve seen in the past few weeks, that would surprise very few.  However, the nature of the advance needs to be considered before we can jump to any conclusions.

The nonstop fashion in which the market has moved indicates to me that it’s been largely driven by bears needing to cover short sales which are losing money.  The day to day advances have been relatively quiet, which isn’t really characteristic of a runaway bull market.  In those environments, you’ll tend to see at least an occasional 200-point daily advance, but lately they’ve been more of the 50-point variety.  The biggest clue to me that this has largely been short covering is that the market has been unable to go down.  Every minor bit of weakness is met with buying, which is out of desperation on the part of bears who perceive any and all weakness as a chance to exit and alleviate the pain.  On the flip side, a bull-driven market tends to see profit-taking, but we’ve not seen that.

With that said, going forward there will be a new element to consider, which is the fact that new 52-week highs have been made, and that of course has the attention of the bulls.  Knowing that the bears are on the ropes lately also builds the confidence of bulls, and many buyers will now expect the dips to each get bought.  That of course may perpetuate the same kind of action we saw throughout 2009, which was a buy-all-dips market.

So the bottom line here is this:  this market badly needs a rest, some selling, whatever you want to call it.  But we can’t fully expect it to just dart south from here because the bulls aren’t likely to walk away quickly.  Could be that we see a pretty good battle shape up, so be prepared for anything and toss any bias out the window!

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: VMC, ATK, HXM, HK, REGN, UTHR, CSIQ, DTG, AIG, AMSC, CAAS, CAGC, VSEA

Swing Trading Candidates:

VSEA bounced from support last week but in a sluggish fashion, and the stock still faces considerable technical overhead.  A small rising trend line is just beneath current prices, and a break of that trend line will trigger a short sale for me at $29.15 as this one could roll back over toward key support upon such a break.

Chart courtesy of StockFinder

Bullish Watch:

CSIQ, ATK, DTG, LEA, CNAM, CIT, VMC, AIG, ROK

Bearish Watch:

AMSC, CAAS, FCX, PLL, HXM, CSKI, HK, REGN, VSEA, ADM, UTHR, FLR, SBAC, CAGC

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!

Inside bars told the story today for the NAZ and S&P 500 as they respected Wednesday’s trading ranges and never gathered momentum in either direction.  The lack of volume was noticeable as well, which contributed to the lack of follow through we saw.  In the end, the indexes finished little-changed, putting in a much-needed day of rest after the recent run.  Even the SPY put a formal end to its 14-session win streak, giving up a mere 6 cents.

It remains a very difficult environment for trading aggressively, as the stretched nature of the averages makes for tough spots to buy.  At the same time, the lack of downside we’ve seen leaves fewer charts with a bearish appearance, reminding us that the short side is also one to be careful with.  This will change at some point, I want to remind you, but until it does some added patience is necessary.  We must wait for better conditions before becoming more aggressive, but we won’t have to wait forever.  A little added volatility will go a long way, it just isn’t here yet.

Tomorrow we have options expiration Friday, which is typically a bit of an unusual day due to the impact of derivatives on the trading action.  Motivations can differ on those days, as the buying and selling is often accompanied by hedges, so it’s always worth approaching such sessions with some added caution.  That’s my game plan, so I’ll be focused on some day trade candidates tomorrow rather than looking to build any new positions.

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: CREE, HOLX, MBI, AMSC, HK, REGN

Swing Trading Candidates:

NONE TONIGHT

Bullish Watch:

SFSF, CAKE, WLP, CREE, DTG, SANM, LEA, HOLX, VAR, AMLN, MBI

Bearish Watch:

AMSC, HXM, PXP, HK, CDE, REGN, ADM

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 SPY streak continued today as it went for its 14th straight gain, and yet again the major averages advanced in a modest but consistent fashion.  It seems there’s a major player or two caught on the wrong side of this tape right now, and they’re slowly being squeezed out with this persistent upside over the past few weeks.

We did see an attempt at some afternoon profit-taking, but it didn’t really materialize into anything but a minor slide from the best levels of the day.  The S&P 500 and NAZ each added to their recent runs, while the DJIA finally joined in with a 52-week high of its own by clearing January resistance.

The day to day pace remains rather quiet, as we’ve sure not seen any huge single-day advances over the past few weeks, but the overall progress is quite impressive.  The daily charts of the indexes continue to show a market that’s stretched to the upside, without any rest or pullback, which means that caution is still wise on both sides of the tape.  The run could persist, or we could see a much-needed rest kick in at any time, so I plan to stay on my toes as long as that remains the case.

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: LEA, VAR, DPZ, HXM

Swing Trading Candidates:

NONE TONIGHT

Bullish Watch:

FOSL, SFSF, CMG, CAKE, PAY, DPZ, CNW, DCP, SANM, LEA, RT, GMCR, BIG, VAR, PVTB

Bearish Watch:

HXM, FSYS, QCOM

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!

Today we saw SPY make its 13th consecutive gain (wow!) while the major indexes each reached for higher ground once again.  The NAZ pushed to yet another new 52-week high, the S&P 500 easily pushed past the 1150 level which has held it hostage in recent days, and the DJIA edged closer to its January highs.

The main event of the day was the FOMC news, but it wasn’t really responded to like a major event.  There was an initial pop, which was subsequently given back in short order, before a late-day bounce took the indexes to their best levels of the day.  Momentum was absent yet again, but stocks were able to put together another advance.

The feeling of this tape is that the shorts are on the run – and have been.  The inability of this market to pull back shows that there are buyers (shorts in need of covering) on every minor dip.  However, strength isn’t inviting a lot of momentum, most likely because the bears are selling into new highs to get repositioned in case the next dip turns into something meaningful.  So far it hasn’t.

Bull-driven markets tend to still have spurts of profit-taking, but we’re not seeing that.  And until the bears receive all the pain they can handle, the slow drift higher doesn’t have to immediately end – despite the fact that even some minor downside is very much overdue at this point.

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: CNW, SANM, QCOM, CTSH, BC, ACOR, FOSL, PAY

Swing Trading Candidates:

FOSL has pulled back in a shallow fashion over the past week with light volume, preserving the uptrend.  A move up through the trend line should put this stock back on the move, so I’ll be a buyer if this one can clear $39.05.

Chart courtesy of StockFinder

PAY is resting here on quiet volume compared to the recent heavy activity it has seen, but price is giving up no ground.  This implies another run may be coming, so I’m watching for a trend line break at $23.05 to signal a buy.

Chart courtesy of StockFinder

Bullish Watch:

FOSL, MED, WLL, PAY, DPZ, CNW, SANM, CTSH, BC, GMCR, BIG, JNPR, BCSI, ACOR, PVTB, INCY

Bearish Watch:

RAX, HXM, GRMN, QCOM

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