Good evening StockBandits!
With a 3-quarter streak of positive starts to new quarters in 2010, as well as plenty of recent strength, the bulls had a reputation to protect on Friday. Technically, they produced another gain, albeit a slight one, to kick off the 4th quarter.
The early action was where the strength was, as I mentioned Thursday evening here, but from there the buyers failed to build on early momentum. Stocks soon gave up their gains, slipped into negative territory, then stayed range-bound for the remainder of the session. By the closing bell, incremental gains had been posted, but Thursday’s highs stayed intact. More importantly, the S&P 500 failed for the second straight session to close above 1150 after crossing it intraday.
So, we’re still in the same spot, both literally and figuratively. The indexes are holding their ground in short-term trading ranges, sitting above former resistance zones and below the mid-May bounce highs. The buyers continue to defend their ground, stepping in quickly to provide support on dips, and that’s preventing pullbacks from gathering any steam.
Although every day of rest right now counts, a more prolonged basing period or even some more intense profit-taking would do wonders for the longer-term health of the market. A shakeout from here would help to mix up the charts a bit, and would offer another opportunity for buyers to get involved at lower prices. Many are simply unwilling to chase prices here after seeing a near-straight-up run over the past month. At some point we will see more selling, but for now, the uptrends are still firmly in place.
Stocks are starting to see a little bit of rest, and some patterns are emerging, but more basing action would be best at this point in most cases.
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!
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Video Stocks Discussed: MCP, LVS, SKX, BKE, FLIR, TIE
Swing Trading Candidates:
TIE just established a higher low on the daily chart and then advanced nicely. In recent days, it has consolidated just beneath short-term resistance. A move up through $20.55 will trigger a buy for me, and as with all day trades, my stop and target levels will be on the Hit List here inside the Hideout.
Bullish Watch:
TIE, JKS, PANL, MCP, RYL, VXX, GOLD, GOL, PRGO, VIT, GDP, MTG, SID, LCAPA, EMR, ALGN, RAX, LVS, FTNT, MIPS, INFN
Bearish Watch:
MON, SKX, BKE, DRI, X, VECO, FLIR, RTN
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.
