Good evening StockBandits!
The market picked up where it left off last week, heading nowhere quickly. Momentum was distinctly absent on a day which saw minor gains and mostly lateral price action. Some morning weakness was followed by afternoon strength, but essentially they cancelled each other out and we finished not far from Friday’s closing levels.
This lack of overall movement we’ve seen since last Tuesday’s gap higher points to the absence of conviction on either side. The good news for bulls is that last week’s gap hasn’t been given back, and the good news for the bears is that last week’s gap hasn’t seen follow through. It’s a catch-22 situation at the moment, but once it gets resolved, we could see the majority shift to one side rather quickly to produce a very nice move. The key is staying awake long enough to detect it when it begins!
One benefit of this lateral price action is that it’s allowing more bases to develop on the charts of individual stocks. That may very well result in more setups for trade candidates, although for now most of them still need some time to continue building.
I’ll cover my game plan for tomorrow in the video, and as always, feel free to share your own thoughts, trade ideas, and questions down below in the comments section.
Here is tonight’s video:
The Bandit Broadcast Video – Click to Watch!
Video Stocks Discussed: FCX, BTU, ACI, CYT, MAN, BHI, MCP, RHT
Swing Trading Candidates:
NONE TONIGHT
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The Hit List is a separate post which contains discussion on open positions and swing trade stops and targets, so be sure to check it for further details on swing trades.
When you are talking about the bulls and the bears. I think I might be a bull.
As a newish trader, I find myself being optimistic and I’m worried it might get me into trouble. I suppose cautiously optimistic would be the ideal, but I think that might represent an optimist who’s been burnt a few times.
A pessimist won’t undertake anything…what’s the point. It won’t work out. But maybe pessimism is required to trade successfully and cautiously. I don’t know.
I’ve never believed in so called realism. When someone says they are neither an optimist, or a pessimist, but a realist, I have always seen that as being wishful thinking, sometimes mixed with a touch of arrogance.
My father used to tell a story about a family with two sons. One son was an incurable optimist, and on an incurable pessimist. One Christmas they decided to cure them. They bought the pessimist a horse! and they filled the optimist’s room with horse manure. The pessimist was really miserable on Christmas morning with his horse and when asked why he said “there must be a catch in it somewhere”. The optimist came down stairs and was absolutely delighted! His parents were confused and asked “why are you so happy?” He said “with all this horse manure around there must be a horse somewhere!”
I’m wondering which son grew up to became a successful trader.
Hey Mark,
Funny story. It definitely contrasts the two personalities well, but the fact of the matter is that both can be successful traders (I believe). I know great traders who are constantly bullish, but when they don’t see what they need to see they just back away…no big deal. And I know great traders who are bears to the end, again though blended with a healthy respect for the market and what it will do to them if they don’t step out of the way of the steamroller.
Just remember the phrase “bulls make money, bears make money, but pigs get slaughtered.” It goes well with this conversation. So long as you don’t get too greedy, you can do well either direction.
Good Evening Jeff. Nice reply! Just what I was looking for. Thanks.
……Still thinking about that. Definitely clear headed around the Issue now. I had read that expression in a book before about pigs getting slaughtered but had forgotten it. My confusion was probably around the issue of greed rather than optimism. I sensed there was something there that was a danger. I think as a new trader, I was maybe having a tendency to getting carried away. I can’t change being optimistic and it’s nice to know that that’s not an impediment. I can definitely avoid greed though, now I’ve identified the issue. I found it a very useful reply.
My father was in the Navy during the Second World War and they didn’t use words like “manure”. I modified the story a little 🙂
“My father was in the Navy during the Second World War and they didn’t use words like “manure”. I modified the story a little” Haha, now that is funny!