Good evening StockBandits!
With the market having bounced a significant amount from the October lows, it finally began to stall out. We saw the NAZ test its high of 2190 without clearing it, and the S&P 500 struggled with the 1100 level.
Two Fridays ago, we saw a downside reversal which sent the bulls home with something to think about over the weekend. Last week, they returned in the mood to raise cash, and the selloff lasted through Wednesday. Thursday’s relief bounce was attractive on the surface with nearly a 200-point gain on the DJIA and a solid advance for the S&P 500, but volume was lighter and the NAZ was unable to erase even the prior day’s losses.
I noted here that an inside day like we saw on Thursday can often prove to be a rest day before a resumption of the short-term trend, which is down, and that’s what we saw on Friday as stocks came under pressure to make new pullback lows. The NAZ found short-term support at the October low of 2040 to keep the uptrend intact (for now), but finished only a few points away from that important level.
So as we head into a new week, it’s tricky. Short-term, the weakness is showing us that the buyers are lacking the strength and resolve they had just a couple of weeks ago. That has me very cautious on the long side. At the same time, another relief bounce could arrive anytime and take the indexes quickly higher as bulls hope for another higher low and bears rush to cover shorts. So I’m planning to keep caution levels high for another day or two, but the expansion we’re seeing in volatility is a very encouraging sign from a trading standpoint – and I’m excited about it!
One final note is that I will be traveling on Monday evening and therefore will be unable to post an update Monday night. Things will be back to normal come Tuesday though.
Here is tonight’s video:
The Bandit Broadcast Video – Click to Watch!
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Video Stocks Discussed: CP, UA, PSS, AONE, JLL, NTRI, CHKP, WHR, FCN, BNI, BEN
Swing Trading Candidates:
NONE TONIGHT
Bullish Watch:
SRS, NTRI, CHKP
Bearish Watch:
WHR, AONE, RL, CREE, STEC, AM, TCO, ANF, FSYS, SY, JEF, HOC, FCN, VMI, BEN, LEN, JLL
The Hit List will be coming out soon with discussion on open positions and swing trade stops and targets, so be sure to watch for it.
Jeff-
Today was my first day of trading based on” The Bandit”, and I was fortunate to start with a
day trade on NTRI. I went in rather small and made a profit that more than covers my initial monthly costs, but I’m curious about 2 things after the first evenings video. Do you
normally suggest an out #, or is it just the general rule of 3 times greater than risk?? Are there times when you would re suggest a stock like NTRI that just broke its 52 week high? Very excited about being a part of The Bandit.
Thanks,
George Kenny
Hey George!
Great to see you and hope your week is off to a good start. Welcome to The Hideout!
To answer your questions, on the day trades an exit level is not provided. That is because the day trades are offered for traders who are willing to manage their own exits, and since intraday strategies can vary so widely from one trader to the next. Some are content to ride an intraday trend for a while, and others may take larger size and just grab the first move before ringing the register. The risk/reward is what I would stress though, as it’s sensible to expect a profit multiple of what is being risked in case the trade doesn’t work. What I’ll do is generally use a 1% stop from entry, and look to book profits in the 2-4% range, scaling out in pieces and watching the intraday chart for logical spots to tighten my stop to.
Yes, some stocks will be relisted if their patterns are still conducive to new entries without having to chase them too far. Another spot you might find a stock repeated is on the Bullish or Bearish watch lists, as those stocks often look poised for moves in the listed direction (bullish/bearish) but may not have as well-defined of a pattern for initiating an entry. So I’ll post them there for additional ideas.
Hope this helps and if I can clarify any of this just let me know. Glad you are here!
Jeff