Good evening StockBandits!
Another Monday morning gap to the upside was quickly sold today as stocks returned to Friday’s closing levels rather quickly. From there, the market spent the bulk of the session churning between the morning high and the 10:10 ET low, unable to gather any momentum in either direction. Late in the day we saw a bit more selling which took the NAZ and S&P negative, while erasing the majority of the gains on the DJIA and RUT.
While today’s action on the surface looked to be a failed bounce attempt, it really was a non-event in terms of importance on the daily chart. It created an inside bar for each of the indexes, which means it respected Friday’s lows. That’s encouraging to the bulls.
Currently the market is still in pullback mode, although we’re seeing volume drying up by the day. That suggests reduced selling pressure, which could evolve into some buying interest if the bulls reappear sooner than later. The overall trend remains up, so I don’t want to fight it, but as I noted last night we’re getting some mixed signals. The NAZ is beneath its uptrend channel, but the S&P 500 is still respecting the low end of its channel, so I’d prefer to wait for more consistency on the technical side before doing anything aggressive. We could still see some acceleration to the downside, so I don’t want to count out that scenario here either.
At the moment, there are some setups which look tradable for tomorrow’s session, so that’s where my focus will be, and we’ll get to those shortly.
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 Tuesday.
Please leave your comments and/or questions below if you have any, I always enjoy the interaction.
Swing Trading Candidates:
BBT has in the past few weeks established a higher low after a big correction and a subsequent test. It also has shown some nice momentum and a quiet rest on this shallow pullback, setting it up for a secondary advance if it can get back on the move. I’m watching for a push up through the trend line at $25.50 to trigger a buy. As with all swing trades, my stop and target levels for this play will be on the Hit List here inside the Hideout.
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:
MEE, SOHU, TZOO, SVVS, SPRD, IMAX, BBT, PNC, CAR, JEC, AMCN, JAZZ, TROW, RES, CVG, CY, BEAV, SODA
Bearish Watch:
FLS, LZ, VFC, AUXL, ECL, CRM, OFC, JAH, MCP, ADM, CYT, CTXS, DLR, BXP
The Hit List contains stop and target levels for my swing trades.
