Good evening StockBandits!
Thursday saw some early negativity on the heels of an earnings report from tech giant CSCO, but we saw the NAZ able to erase some of its losses by the end of the session. That decline filled the gap from early-Nov, which is healthy to see. Friday’s action was a bit different though, in that we saw a weak open followed by additional selling and only a minor lift from the worst levels of the day into the closing bell.
We know the dip-buyers have had tremendous success since August, and they’re not likely to walk away quickly. At the same time, we’re finally getting some profit-taking here, which is simply a part of a healthy uptrend.
The technical concern here is the fact that the NAZ has already closed beneath its uptrend channel, and the S&P 500 is threatening to do the same. That wouldn’t necessarily spell an end to the uptrend, but rather a change in the pace of the uptrend. There’s a big difference, and it’s worth pointing out. The uptrend consists of higher highs and higher lows, whereas the pace of the uptrend can change and still keep the trend intact.
I do think it’s interesting that we saw new highs made and now we’re getting a pullback, which I noted as a possibility here in recent weeks. That kind of move tends to bring in the remaining holdouts with cash on hand, which many times is faded (sold into) by institutions. Essentially it leads to a bit of a bull trap in that those who bought high in expectation of continuation are now left holding the bag. Time will tell if that’s the case for them or not, but in the short term we’re seeing a test of their resolve.
Heading into tomorrow’s session, there are a few setups I’ll be monitoring closely for entries. My timeframe for these new trades will be for day trades, but once we see the indexes moving better together and not mixed (ex: NAZ below channel, S&P still inside), I do expect to be making more swing trades.
As a reminder, for a short time longer I’ll be utilizing the written format of the Broadcast as I get the new office set up with the equipment I use for recording the nightly video. Once that’s ready, 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:
SOHU, GPS, BIIB, SVVS, LULU, MCHP, TSLA, IRF, MEE, TGA, AMCN, JAZZ, ISIS, TROW, GTI, IOC
Bearish Watch:
FLS, V, LZ, VFC, AUXL, XRAY, LNCR, THOR, JAH, MRO, ADM, MELI, CYT, FSYS, SHLD, BIG, EMS
The Hit List contains stop and target levels for my swing trades.
