Good evening StockBandits!
QQQ continued the streak today to make it 14 straight advances, grabbing the headlines on an otherwise uneventful, quiet day. Each of the averages were able to post gains, but nothing of great significance. The intraday ranges were pretty narrow, and it seems traders are caught in a bit of a Bermuda triangle here between big upcoming earnings reports, a market that’s perhaps too strong to short yet, and an advance that has become a bit too extended to chase.
The result of those factors today was limited buying, limited selling, and plenty of sitting on hands. That’s actually not a bad plan right now, truth be told. My watchlists are limited right now to not much more than a handful of names. Bullish stocks have largely become extended in this market ramp, while bearish setups are extremely few and far between. It’s definitely a time when patience is prudent and doing less is more. Chasing this move on the long side in many cases would mean subpar entries, so why not stay selective until quality bases and patterns are more plentiful?
Perhaps some of the early earnings reports will roll in and give the market a reason to rest. Should we see that happen, some short-term levels could then be established for trading against, whether it’s resistance or support you choose to focus on. At the moment, however, prices are lofty and extended and just not very compelling.
Let’s get to the charts.
QQQ – The NASDAQ 100 ETF put up its 14th straight advance today, which is an incredible feat in itself. This weekly chart shows it just now clearing some recent resistance near $75, and with another $5 of room to achieve a $10 measured move since breaking out from its lengthy channel in May.
SP500 – The S&P is looking pretty stretched here and volume got quieter today as price edged slightly closer to the all-time high of 1687, now just 5 points away. Technically, this index is ready for a pause and at a spot where one is certainly justified, but that in itself guarantees nothing. Best way to handle this is to respect the fact that bulls would have reason to lock in gains here should some selling kick in, and thus to be highly selective with new longs.
RUT – The RUT just can’t seem to rest and today put up another solid gain, taking the current run to 10.7% off the June 24th low. This is no place to initiate new longs in small-caps, but perhaps a rest will arrive sooner than later and we see a little backing and filling. There’s actually a little room left for another measured move (orange arrows) but I wouldn’t overstay my welcome after a lift like this.
DJIA – The DJIA got closer to key resistance today, easing past 15500 before backing off slightly. This senior index is respecting the May high for now, but a breakout could see the pace accelerate. Ideally, we see a rest first, but the market does not often accommodate ideals.
Notable Names:
CSIQ shot higher today as did many other solar stocks. The difficulty is in getting on board these kinds of moves, and this stock is an example of one that just doesn’t seem to “obey the rules” when it comes to patterns and bases. Recently it failed a pair of bullish setups, yet tonight sits at the top of its chart. Whenever I see a stock like this, I tend to just stay away from it since it moves to its own rhythm and not one that’s easily outlined on the chart.
F is looking tired here after a big bounce of $3 off the June 24th low. Today it made a new high and then finished almost flat, and volume is the missing ingredient here. This stock needs rest, like so many others, before it’s ready for a new play again.
NAV was highlighted here last night as a short sale candidate but fortunately did not ever trigger an entry. Instead, it turned sharply higher to negate the bearish setup, resulting in a removal from my swing list tonight.
IRBT is pressuring a small trend line here and if it can clear $40.40 it could catch a quick bid for a momentum play. Earnings are due out next Tuesday according to Yahoo! Finance, so I am not interested in a swing.
GMCR moved to a multi-day high today and cleared the upper channel line. It has room for some continuation, so I like it for a momentum play above $73.50 for Tuesday. There’s not a clear-cut swing exit, so I won’t hold this one overnight.
GRMN is threatening to break out here and has an unfilled gap from earlier this year it could easily get to work on. I like it for a momentum play on Tuesday if it clears $37.10, but here again there’s no well-defined swing exit on this chart.
SBGI is basing here near its highs and rising support is catching up a bit each day. A little more time in this base would reduce the risk (difference between breakout price and support) for a swing, but if it clears $32.05 on Tuesday I’ll simply take it for a single-day momentum play.
New Swing Trade Candidates:
No new swing candidates tonight.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
