Good evening StockBandits!
The market edged higher again today, creeping back up to new recovery highs in the case of the NAZ and S&P 500. True to recent form though, it was far from a banner day for the bulls with only modest gains put up across the board and although volume levels improved over Tuesday’s levels, they were still below-average. For the S&P 500 to have painted a new all-time high, there was still an absence of enthusiasm.
This is a peculiar environment we find ourselves in right now, as the buying has been so quiet and virtually all emotion has been removed from the market in recent weeks. Dips have been kept extremely shallow, and even though the buyers emerge quickly after declines they seem to lose their urgency once they regain control of the tape. The rallies have been incremental and volume has been light, suggesting that all the bulls care about right now is just not allowing any downside. Funny enough, a dip would likely free up some cash and at least open the door to some heightened intensity for rallies.
Right now it’s all about a very slow grind higher with intermittent pauses of lateral movement. Given the mixed conditions of the averages (S&P strong, DJIA flirting with resistance, NAZ improving, RUT still struggling), many charts remain sloppy and my watchlists are sparsely populated. When the market’s not moving with any velocity like it is now, trading becomes much tougher. When that’s the case, the best course of action I’ve found is to keep my plays limited and my timeframes brief. It’s a thin list, so I’m therefore considering only single-day plays as we head into tomorrow’s session.
Send me some charts you’d like to see covered during Thursday’s Charts on Demand video and I’ll add them to the list.
Let’s get to the charts.
NAZ – The NAZ lifted just enough today to make a new recovery high, edging past the highs of the past few sessions to start getting north of the consolidation area. It’s still caught between 4185 (unfilled gap) and 4286 (next resistance), but it’s trying to make some headway here so we’ll see if it’s able to produce the needed follow through. Volume improved but you can see it remained beneath the 1-month moving average, so by that standard it was still light.
SP500 – The S&P had been resting the last couple of days but kept closing near the session highs. Today it closed strong once again, but this time it made a new high. What’s so curious about this move is the sluggish nature of it, as there seems to be no urgency on the part of buyers. I won’t argue with all-time highs, I just won’t aggressively chase them with the extended look of this index and the lackluster volume we keep getting.
RUT – The RUT is still beneath 1137 but turned up today to potentially put an end to the short-term dip. We now need to see some follow through, but if it can reclaim 1137 then the next order of business will be that of clearing 1160.
DJIA – The DJIA only added 15 points today, but it was a gain nonetheless and that makes 8-of-10 or 10-of-13, whichever way you want to look at it. That’s persistent strength but the magnitude of the move has been somewhat limited and price is still dealing with short-term resistance, so there’s plenty of room for improvement here regardless of it being just 19 points from the all-time high.
Notable Names:
FB has spent considerable time caught in a wide range for the past couple of months, but this consolidation near resistance is different. A breakout may be imminent, but upside volume is still pretty pathetic so I am not interested in a swing. Rather, I’ll take it for a single-day play on the long side if price can make a new recovery high at $64.40. If it does, there’s about $2 of room up to the next level, which was former support from March.
BBY was listed here last night and made some progress today, but could still see an upside spike. I’m still not interested in a swing here, but I’ll give it another shot as a single-day play if it can make a new recovery high at $28.70.
PEIX is basing here after a lift from recent support. The upside volume here is not ideal, nor is this a real tight pattern, so I won’t take it for a swing. Instead, I’ll just look to take it for a single-day play on the long side if price can clear $13.70 and start a new leg up.
AU is already in a downtrend and tonight is resting just above short-term support. A break below it at $15.30 could trigger some selling, so I like it for a single-day play on the short side if that occurs. There’s some room to head lower, but the risk/reward for a swing lacks appeal so I won’t be keeping it overnight.
New Swing Trade Candidates:
No new swing candidates tonight, still waiting for better patterns and market conditions to warrant multi-day plays.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
