Good evening StockBandits!
Last week we saw some continued gains as the indexes each stretched enough to reach new recovery highs since the March lows. That of course was follow through to the prior week’s bounce from the pullback of 3 weeks ago, but the upside was pretty modest once again. The NAZ gained 17, the S&P 500 gained 16, and the DJIA tacked on 131 on the week.
Although this market keeps climbing higher, the uptrends are still very much intact, and prices are expanding almost by the day, there’s a distinct lack of volatility. It wasn’t long ago that we were seeing day-to-day fluctuations of 3-5%, whereas lately the notable moves in the indexes have only been 1-2%. As a result, more stocks have entered the tradeable universe when it comes to price or volume, and yet not a lot of them are moving enough to make them trade-worthy. This is making for a very interesting dynamic, and it’s likely to result in some shock to many traders once we do see an expansion in volatility (and we will, don’t worry).
For the time being, the bulls continue to maintain the upper hand. Every dip is being bought, and the bears have generally been frustrated with short sales which are reluctant to pan out. The combined mentality of those two groups is keeping a persistent bid beneath this market for now, so we’ll continue to respect that while watching for any meaningful changes of character.
Let’s get to tonight’s video.
The Bandit Broadcast for 10-15-2009 – Click to Watch!
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Video Stocks Discussed: MOD, WHR, YONG, CTXS, CATY, PKX, AONE, CREE, TRW, DWA, TEN, GDP, MAC
Swing Trading Candidates:
GDP has exhibited some solid momentum recently, followed by some needed rest last week in which the stock gave back no ground whatsoever. It has established some short-term resistance, and I’m watching for a breakout through $30.50 and will use that level as a pivot for a buy.
MAC has come down considerably from its highs, and in the past couple of weeks the bounce attempt has been rather lame with weak volume. This stock has also established a rising trend line, which if broken, could spark another wave of selling. I’ll be looking to short this stock if it breaks the trend line with a move down through $28.70.
Bullish Watch:
GDP, APA, MOD, CATY, PKX, WHR, BTU, THC, ACI, CEDC, BCSI, YONG, AONE, COP, PQ, HLF, RL, CTXS, CREE, HOGS, SBGI
Bearish Watch:
MAC, TRW, STEC, SPW, GET, GYMB, CPT, A, LBTYA, NTES, DWA, TEN
The Hit List will be coming out soon with discussion on open positions, stops and targets, so be sure to watch for it.
for day trade stock, some volume was low,spread was wide.price was low teen. I prefer price 20+, spread less than 3 cents. daily volume over 1.5 M. I know it’s not easy to find the stock to fit that.
Hi Ping,
What I try to do with the day trades is locate patterns which look ready for short-term moves and consider those for day trades. Once the stock crosses the level indicated, it becomes a trade for me.
My level of conviction in that trade will definitely include the volume and the bid/ask spread it’s trading with. The more active a stock is, the more I’m interested in it. But if volume is light or the spread is too wide, then I’ll trade it smaller or perhaps not at all.
Since unfortunately I can’t tell the night before what kind of spread the stock will have or how heavy the volume will be, what I’m doing is setting up potential plays which meet the right criteria for me. Then under the real conditions in tomorrow’s market, I’ll have a better feel for just how much I happen to like them.
Hope this makes sense and is helpful!
Jeff
Hi Jeff,
In response to you and Ping, may I suggest and request you doing a brief hindsight 20/20 review of any day trades you enter into?
Like you said, there are many factors you can’t know until just before or after the trading session begins
But I would find it tremendously useful and insightful if you could do a recap of what happens on the day trade front (Why did/didn’t you enter into a particular daytrade)
It would also tie in nicely and bring a sense of closure to those day trading candidates you bring up in the broadcast.
Kim
Hi Kim!
Thanks for your comments and the suggestions. An occasional review of a day trade could be helpful, so I’ll try to include that on occasion going forward. However, it will not become part of the nightly video because of a couple of reasons.
First, I want the nightly video to be forward-looking, so no trades are reviewed there. It’s where tomorrow’s ideas originate, so I want to focus on that in the Broadcast.
Second, the day trades are offered here for anyone who is fully willing to manage those plays themselves. I’m happy to highlight the patterns and the entries, but for intraday trading there is also a very wide variety of styles…some will book fast profits, others may hold for several hours to catch a larger move. My intention is not to teach day trading in this format, as it simply isn’t the right setting (again, a chat room or something along those lines is really required for true day trading discussion, and that isn’t the aim here).
So while I will day trade and am also happy to share some setups which look good for quick trades in the next session, I don’t want the focus of this site to be on day trading and every one I took today. There can still be some valid lessons originate from them, which I’ll try to include occasionally going forward, but the day trades are really intended for traders with more experience who are fully comfortable managing them.
Long-winded answer, but I’m hopeful that it better clarifies some my objectives for The Bandit Hideout!
Jeff
Thank you for the longwinded response 🙂
No, I wouldn’t want it to be part of the broadcast for the same reasons as you – it should be forward looking.
But a brief paragraf on the update or hit list.
Anyways, we can only wish.
Have a great day
Anytime Kim,
I’ll try to work some day trade reviews in going forward. Won’t be a daily thing, but I’ll try to include some.
Go get ’em today!
Jeff
Commodities are looking interesting. The sector looks overextended short-term with a minor two day pullback. That led me to FCX. It’s forming a bull flag pattern. The stock experienced good volume forming the pole and lighter relative volume during the recent consolidation. This looks like a bandit trade to me. Fellow bandits may want to add it to their watch list.
Hey Omar,
Excellent setup! Thank you very much for sharing it here, I really like that play. A breakout at $76.75 would clear resistance and indicate it’s back on the move out of the tight consolidation. Great eye!
Jeff
Dollar might be imploding, which might point to commodities going up. Although some people have pointed out that when the dollar goes “too low” the correlation stops since commodity prices too high makes it hard for US export businesses to sell without raising their prices. At any rate, a close watch on the commodities, perhaps via the ETFs might be a good idea with individuals (like FCX and others)
I am trying to leave some stocks on my watch list on a blog…see latest at https://at-stk.blogspot.com/
Thanks for sharing those Jon, looking good!