Good evening StockBandits!
The indexes ended the day mixed and little-changed despite getting a taste of everything intraday. Stocks spiked higher around 10am ET, only to peak a half hour later. From there, we saw a steady slide which picked up steam into mid-afternoon, followed by another sharp bounce that took the averages right back to the areas where they opened this morning. It was some lively price action, yet the net result was of great benefit to neither the bulls nor bears.
The big question tonight is whether today’s intraday rebound carried with it any meaning. The averages have been pulling back for a few sessions now, and the expectation for many is that it’ll again prove to be similar to recent pullbacks which were kept brief and shallow. So far, this one fits that description, so there’s certainly a chance that today’s lift from the low signaled a pause in the pullback. We’ll find out soon, but with some premarket econ numbers tomorrow and a jobs report due out Friday before the bell, anything is possible.
My watchlists have thinned considerably. There are many stocks which are in uptrends (bullish) or downtrends (bearish), but when it comes to my watchlists what I’m doing is earmarking some stocks which look to have some imminent potential to move in the listed direction. I eliminate extended names and the more choppy charts as well, and tonight my bullish/bearish lists are quite simply very limited. When that’s the case, I tend to take it as a cue to avoid forcing trades. More will surface in time, and my focus is quality rather than quantity anyway. For tomorrow, there are a handful of cashflow setups I’m eyeing for single-day plays, but nothing I’m adding to my current swings.
As a reminder, tomorrow I’ll have this week’s Charts on Demand video where I take a look at your stocks. If there are a couple of tickers you’d like me to review, just hit reply to this email and send them to me so they can be included.
Let’s get to the charts.
NAZ – The NAZ painted a green bar today, despite gaining only 0.80. Nonetheless, it gives the look of a pullback completion. Now, the next order of business will be upside follow through and the assistance of the other indexes, but the trend here remains up.
SP500 – The S&P finished lower today but only by a small amount and did see a nice lift from the session low. Furthermore, it held above 1775 (former resistance turned support), leaving it in shape to possibly head back toward the highs if the afternoon bounce finds follow through.
RUT – The RUT is struggling here as it just can’t seem to get clear of 1123. Tonight it finished less than 2 points from that level (beneath it), after a 10-point lift from the session low. This index still has higher lows and higher highs in place, and this could prove to be another if prices can firm up.
DJIA – The DJIA rallied 98 points from its low intraday but still finished in the red for the fourth straight session. The biggest aspect of this chart is the fact that price remained beneath the broken uptrend channel. That adds validity to the break, and places greater importance for the bulls to establish a higher high on the next bounce to negate a potentially negative change of character taking hold.
Notable Names:
GLD turned up today on the heels of a minor bounce Tuesday. This puts price back above the descending trend line, which if it can hold, could also help to avoid a test of $114.68 from the summer low. One day doesn’t make this chart bullish, but there’s an opportunity here for a positive change of character and I wanted to point that out.
SLV has a similar chart to GLD and also saw a break above the descending trend line today. One day doesn’t make it bullish, but it’s the first step to carving out a low. Now it will need to exhibit some follow through, then pull back to create a higher low. I see no play here for now.
SHLD is an example chart I wanted to share. News surfaced today that Eddie Lampert was reducing his stake in SHLD down to 50% to meet redemption demands of investors wanting out of his hedge fund. I mentioned year-end cross currents a few nights ago as including fund redemptions, and this is a good example. Technically, the stock has a recent history of making this type of move, as we saw a similar one take place in October. Always take note of the recent character of a stock, as it can many times shed some light on what types of moves are possible.
WLL is trying to lift here and a break above the trend line at $62.10 could see the stock gather attention. I like this setup for a single-day play on the long side if that level is cleared, but only if.
NOW is trading back and forth in recent weeks with a bit of a high trading range. Tonight, price is pressuring a short-term trend line and a push through $53.40 could invite some follow through. I like it for a single-day play above that level, but am not expecting multiple days of follow through so I won’t be holding it for a swing.
SM is working on a large wedge here and if the wedge can tighten further I’d be interested in a swing. For tonight, however, I like it for a single-day play if price clears $92.70, as that would allow me to participate in the initial push higher out of this large base.
SCTY is stalling out here after a bounce and now a break below rising support at $51.20 could produce a quick pullback. I like it for a single-day play on the short side if the trend line is broken, as I’m only interested in participating in the initial move lower.
UBNT is facing a decision here after a minor bounce. Price has met resistance a few times, but volume has diminished. A turn lower through $39.50 looks good for a single-day play on the short side, as the recent low could quickly be tested. This stock has been indecisive of late, so I’m only interested in participating in the initial move (rather than keeping it for a swing and expecting follow through).
New Swing Trade Candidates:
No new swing candidates tonight, watch lists are thinner and most charts need more work to tighten their bases or further validate key levels. Sticking with existing exposure heading into tomorrow’s session.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
