Good evening StockBandits!
All but the small caps made new highs for the week today as early strength was able to hold, keeping the averages green for the day. Volume was light, but the S&P again pushed past 1883 (wake me up when the breakout’s for real). The messages are still mixed among the indexes, with the blue chips much closer to highs and the NAZ and RUT much more closer to their spring correction lows. At some point, we’ll see one side win out and drag the other along with it, but as of yet that still hasn’t happened.
A big concern for the bulls right now should be the ultra-low VIX, which closed beneath 12 today for the first time in 9 months. That points to extremely high complacency, and with the broad market struggling to make any lasting upside through key resistance, one could certainly make a case here for a pullback. We may have to wait until next week on that though, as the next two days it’s likely that traders start to step away from their screens for travel or simply some R&R to get the holiday weekend started early.
I’m keeping a very select list of trade candidates ahead of the 3-day weekend, as the main catalyst for the week (Yellen today) has passed and volume is already starting to taper off. There also aren’t a lot of great setups out there anyway, as all the chop of late has made for some really wide and loose bases. All those things together are keeping my focus on the single-day timeframe right now, although eventually more swing candidates will surface. For tonight though, I’m sticking with single-day plays when it comes to new setups.
I will have a Charts on Demand video tomorrow, so if there are some tickers you’d like to see me cover in the video, send them my way!
Let’s get to the charts.
NAZ – The NAZ put together a solid day, it’s just that it remains caught in this mid-level range and volume once again didn’t confirm the advance. At some point that may happen, but for now the price action resembles previous bounces which were sold in recent weeks.
SP500 – The S&P again edged past 1883, finishing at the high and just 14 points from the all-time 1902 high. However, volume didn’t confirm the move and it’s still just 5 points from the breakout level we’ve seen fail on numerous occasions in the past several weeks.
RUT – The RUT only managed a 5-point lift today and stayed inside Tuesday’s range. This index doesn’t appear to be getting up and running just yet, so we’ll have to wait and see if it’s going to test or break the 1079 level or not.
DJIA – The DJIA snapped back quickly today on the heels of yesterday’s decline, and this has just been par for the course with near-daily back and forth moves like this. Lasting momentum has been absent, and price is still inside the range, so it’s tough to be very convinced by today’s light-volume rally.
VIX – The VIX closed below 12 for the first time since August 5, 2013. That coincided with an S&P 500 slide of 4.5% over the next 3 weeks, which is just what tends to happen when extreme complacency arrives. This fear index isn’t forbidden from going lower, but historically this has been an area it has held. Any turn down in the market would coincide with a VIX lift, so it’s something to keep an eye on here as the S&P again deals with key resistance.
Notable Names:
MGM is looking like it may attempt to turn back up here after a pullback and several days of stable price action. I like this one for a single-day play on the long side but only if price can clear $24.30 to get through the trend line.
NRG still looks good for a pop if price can clear the trend line, so I’ll be setting up this play again to grab it for a single-day play on the long side if it gets through $33.90.
LNG is approaching resistance and could soon break out from this large ascending triangle pattern. I like it for a single-day play on the long side if price can make a new high at $59.55. This base is still too wide for a swing but gets a little tighter each day.
HAL is trying to continue the short-term bounce but looks to be struggling here as volume tapers off. A break below rising support at $62.55 looks good for a single-day play on the short side.
FSL still looks ready to break support here so I’ll grab it for the initial move as a single-day trade on the short side if it breaks $20.75. There’s plenty of room below and with price looking heavy here it could bring a swift break.
New Swing Trade Candidates:
No new swing candidates tonight, charts are sloppy and the upcoming 3-day weekend is likely to keep volume light, making it a flipper’s market.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
