Good evening StockBandits!
The market basically flatlined today ahead of tomorrow’s highly-anticipated Fed policy announcement (the meeting began today), holding onto Monday’s advance but unwilling to add to it. The closing numbers were all red, but each decline was insignificant. Intraday, we did see a minor morning slide, but bids strengthened and stocks returned to the areas where they finished last night.
The main event tomorrow will be the FOMC statement at 2pm ET, followed by a press conference, with traders hoping for some clarity on QE tapering. We may or may not get that, but right now all else pales in comparison when it comes to importance and attention. It’s important to recall that it’s not the news itself that carries importance, but how the market responds to it. I have no sense of what the Fed may say, as that’s a guessing game. However, the price action will tell us what the market collectively thinks, and will in turn allow us the opportunity to ignore it or go along for the ride.
I typically wait for the first 15-30 minutes after an FOMC announcement to let some of the dust settle before placing reactionary trades. There have been some non-event Fed days this year, but with this one being billed as a biggie, there certainly could be some chaos in the aftermath. Keep that in mind if you’re searching for trades once the news is out of the way. Staying small and nimble has its advantages in a fickle environment like Fed days tend to be.
Let’s get to the charts.
NAZ – The NAZ pulled back into some of the Monday gap this morning but lifted from its low to finish the day down only 5 points. This index is right in the middle of two key levels: the high at 4081 and former resistance at 3966. That gives it room to move in either direction here without any meaningful technical consequence.
SP500 – The S&P tested the 1775 area again today but closed at 1781, 5 points from the key level it has respected going back into October. The recent lower high and price now leaning on support certainly gives the bears an opportunity if they want it. A downside break brings 1746 into view as the next number to watch, whereas a rally gives it room to 1813.
RUT – The RUT got no traction in either direction today as it finished less than 1 point from last night’s closing level. Price is still beneath 1123, although it’s close enough to reclaim on virtually any strength. Should it fail to do so, the short-term pullback would continue with last week’s low of 1099 being the first number to watch.
DJIA – The DJIA stayed within its short-term descending channel today (dashed lines) with a single-digit decline and an inside bar. A higher high beyond 16058 would be required to put an end to the correction phase, whereas a break below 15703 would allow it to continue.
Notable Names:
GOGO was listed here last night and offered a nice pop today as a single-day play. The finish well off the day’s high is exactly why I like to play these…they offer quick moves for cash flow. On the flip side, a swing in a stock like this requires a wide stop and the finish today may have been a bit irritating. This stock may rally much further, but playing the initial pushes through trend lines and levels like this has been a good way to navigate broad market indecision like we’ve been seeing.
FSLR is on my radar but doesn’t look quite ready yet for a play. I’m watching this small rising channel as price bounces, but it finished pretty strong today and I’d prefer to see price stall out. Once it does, a quick retreat to fill the gap could offer a decent play on the short side.
UA is still shaping up here but today’s upside volume isn’t indicating an imminent move. Because of that, I’m not setting up a swing. However, a pop could still happen soon, so if it clears $86.10 on Wednesday I’ll just grab it for the initial breakout and exit same day.
PAAS is still looking set for a pop here so I’ll again set up a single-day play on the long side for Wednesday if it can clear $11.35. There’s an unfilled gap to $11.80 which it could easily reach.
QIHU is still looking heavy here but a swing stop continues to be rather wide. For that reason, it looks best for a single-day momentum play upon a break to a new low at $75.70 on Wednesday.
QCOR is still hugging rising support and another finish well off the high today leaves it not far from a possible break. I like this setup for a single-day play on the short side if it breaks $53.20 on Wednesday. I’m only looking for a quick spurt lower, plus this is a fickle biotech stock so I’m just not interested in taking it overnight.
BITA broke down two weeks ago and has been unable to bounce since then. It’s now resting just above support, so I’m looking for a single-day play on the short side for Wednesday if it undercuts $26.95 to make a new correction low. I’m only interested in the initial breakdown as there’s a congestion zone not far below which price could gravitate toward and then respect. Stated otherwise, the risk/reward for a swing just isn’t very favorable so this is only a single-day setup for me.
New Swing Trade Candidates:
No new swing trade candidates tonight. I’ll stick with my existing positions and some newly-modified stops (see below) heading into Wednesday’s session.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
