Good evening StockBandits!
The bulls arrived ready to roll as the new week began, and stocks pushed higher for a steady 30 minutes right out of the gate this morning. The initial strength saw some rest, but as bank stocks began to weaken, so did the market. Pretty soon, a sharp selloff ensued, erasing the early gains and taking the market well into the red where it remained for the rest of the day.
Today’s reversal offers us a couple of insights. First, the short-term key resistance levels were validated, so the recent highs are indeed important. Second, this isn’t the first downside reversal after strength we’ve seen. Last week’s big turnaround on Wednesday hinted at some short-term fatigue, so to see the same thing occur today offers some confirmation of that. Third, today we saw both the NAZ and S&P move back below key levels on a closing basis (2150 & 1074, respectively). This also suggests some profit-taking might finally be arriving, so the next few days could prove to be very important.
The positives this market has going for it include the fact that we are still in an uptrend and that today’s downside never really saw follow through selling into the afternoon. The bulls have proven themselves over and over, so we can’t be too quick to jump to conclusions that perhaps they are suddenly absent. Rather, we’ll take note of a possible short-term change of character and see where it leads.
Here is tonight’s video:
The Bandit Broadcast Video – Click to Watch!
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Video Stocks Discussed: BCSI, NUS, PLCE, CRM, X, ANF, PFCB, MCO, ROVI
Swing Trading Candidates:
ROVI reversed hard a few weeks ago and since then has been unable to bounce. It’s leaning on short-term support, and if it breaks it, this one could easily tumble further before earnings are released in 2 weeks. I’m watching this one for a break of the $28.10 level to trigger a short sale.
Bullish Watch:
BCSI, NUS
Bearish Watch:
AONE, STEC, GET, A, NTES, ROVI, BKE, AMAG, AM, KCI, ANF, FCEA, MCRS, JEF, GVA, NVDA, PFCB, X, VMI, FWLT, AZO, MCO
The Hit List will be coming out soon with discussion on open positions, stops and targets, so be sure to watch for it.
