Good evening StockBandits!
True to form for the week, the major averages finished Friday as flat as a steamrolled tortilla ahead of the highly-anticipated November elections and FOMC. The S&P 500 and RUT each finished less than 1 point from the prior week’s close, while the NAZ added a few points and the DJIA lost a few. All in all, it was a week of rest and choppy intraday ranges, which proved to be a technical nonevent. Although there was no excitement, that did allow the indexes to digest some of the recent strength and base a bit in front of major news in the days to come.
The good news is that the coming week is the one we’ve all been waiting for! Not only do we have elections on Tuesday, but we also get the FOMC on Wednesday, which should help to clear some of the uncertainty which has left traders so indecisive of late. While the uptrends are still intact, we’ve seen the pace slow in recent weeks and a contraction of the daily ranges along with it. Follow through has been quite difficult to locate, especially intraday, as the market has made it a habit of reverting back to the flat line, regardless of strong or weak opens.
With the major news facing us in the next 3 days, I’m unwilling to add multi-day exposure to what I already have. Once we see the market’s response to whatever occurs, it should allow for some better price action to enter the arena. As a result, I’ll primarily be day trading on Monday, Tuesday and Wednesday.
Speaking of the market’s response to the news, I want to remind you that it isn’t the news that matters, but how the market’s reaction to the news. As traders, we need not predict what will happen or how events may unfold, but simply to position ourselves accordingly once momentum surfaces. Let someone else move the markets, but hop on board for a ride when they start making waves.
Anything is possible at this juncture, as is so often the case. The trend remains up, but the pace has slowed of late, and it’s possible we see an acceleration move higher. On the other hand, it’s also possible after having reached key resistance zones that the news prompts some long-awaited profit taking, so I’ll be on my guard for a breakdown from the steep rising channels outlined in tonight’s index charts (see below). The point is that this week it’s imperative to keep an open mind to whatever comes along, because it’s likely we’ll see volatility pick up substantially from the recent lull.
As a reminder, for a few weeks I’ll be utilizing the written format of the Broadcast as we’re in the process of moving and therefore without the equipment I use for recording the nightly video. My wife and I are expecting our 2nd child in December, and needed more space for the growing family. Once we’re settled and I have my new office set up, I do expect to be back to the usual video format. To those who prefer the video, thanks for your patience. To those who prefer this written format, I hope you are enjoying seeing more text! At any rate, it’s refreshing to me to be able to mix it up a bit. And of course, your input is always welcomed.
For tonight, my notes are on the charts below for index levels and potential trades I’m eyeing for Monday.
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.
Bullish Watch:
BVN, SWI, NTES, GSM, CCL, CIB, CAGC, ATW, AA, BKD, SCCO, BYI, OAS, KMX, SOHU, DAR, PCX, PWE, SPRD, CCME, IOC, PENN, GRA, TK, AME, SLB, BEXP, BGC, ALB
Bearish Watch:
DGX, FLR, ICE, VMW, MON, CREE
The Hit List contains stop and target levels for my swing trades.
