Good evening StockBandits!
With the indexes quite extended after going 6-for-7, most of them put in some much-needed rest today with minor net changes and mixed results. The NAZ was the standout as the only index finishing higher on the day, but even it stopped just shy of Wednesday’s highs for good measure.
Earnings reports are starting to roll in, so the next few weeks we should see a ton of names reporting. That’s a reminder to keep an eye on the earnings calendar for any overnight position in particular. GOOG reported this evening and is trading higher after hours, which may give a jump-start to tech names in the early going tomorrow. We also have some econ data ahead of the opening bell and shortly after which could affect the mood as well.
All in all, the market is digesting its big run quite well so far. We’ve seen a brief attempt at some rest here, which is nice, as every day counts. A couple more days of basing action would likely do wonders for many individual charts by helping to set up some bull flags and pennants from which to trade. We’ll continue to monitor the action one day at a time, but so far the bulls are maintaining a bid beneath this market while keeping the bears on the run.
I’ll run through some notes on the indexes here and then share more thoughts on their charts below, along with the trades I’m eyeing for Friday’s session.
NAZ – Posted a gain but respected yesterday’s high. This index remains very overbought in the short-term, which means a pullback or some rest would be extremely healthy at this point. Could be we see a new recovery high created first.
S&P 500 -Failure at 1220 yesterday signaled fatigue, and today we got a small rest on light volume. This index needs additional rest, but with a shot at a pullback today, dip-buyers stepped in to provide support.
RUT – Still about 3% off key resistance at 718, and still very stretched after a huge run off last week’s low. Rest would be ideal.
DJIA – Respecting 11529 here as it attempts to rest, but much more basing or even a pullback would be best to see at this point. If the dip-buyers continue to assert themselves, it will become more likely that the next pullback could result in a higher low on the daily chart, opening the door for continued strength into year-end.
The current lack of setups will at some point come to pass, but for the time being we have to respect it and I think cash is a great place to be at the moment given all the uncertainty this market is facing. Stay patient out there, because we will see some good opportunities emerge from all of this, perhaps in as little as a few days if the market will rest for a few sessions.
Tonight I’m going with the written format as I know some of you enjoy being able to skim the setups. My notes and trade levels are provided on the charts below.
Please leave your comments and/or questions below if you have any, I always enjoy the interaction.
Swing Trading Candidates:
NONE TONIGHT
Day Trading Candidates:
These are the trades I’m eyeing for potential plays tomorrow. I will not be holding these overnight, and will wait for these levels to be crossed before entering trades. Please see the Day Trading Strategy for more details on how I manage these trades.
The Hit List will not be posted tonight as I am 100% cash overnight and there are no new swing trades for Tuesday. The Hit List typically contains stop and target levels for my swing trades.
