Good evening StockBandits!
The indexes gapped higher today, showing no concern for today’s election outcomes or tomorrow’s FOMC implications. The market dipped slightly from the opening highs, but held its ground in positive territory while essentially churning for the remainder of the day.
Today’s price action held consistent with the recent domination of the bulls, as they seem confident at this point regardless of the outcome from any news flow. From a technical perspective, the NAZ is testing its highs of the year here, which is interesting how that timing works. Many times the technicals tend to coincide with scheduled news, and the headlines in this case could either produce a breakout or a rejection of the highly-important 2535 level. The RUT was able to clear some important short-term resistance today at 710 and could now be free to advance further, so long as the other indexes avoid any downside reversals from here. Meanwhile, the S&P and DJIA remain slightly beneath their spring highs and will need just a bit more help to get over those humps.
Tonight’s election results are likely to be digested tomorrow, but the main event will be the FOMC announcement at 2:15pm ET. Many expect the Fed to unveil more info regarding further quantitative easing (QE2). Expectations for further stimulation from the Fed have helped prompt the current rally, as the bulls see a win/win scenario with aid from the Fed or an improved economy, whichever happens to come first. Toss into the mix the technical traders who recognize an uptrend, and there’s logic to support buying the dips until it fails to produce profits.
Heading into tomorrow, my game plan is to keep my timeframes for new trades brief once again. It’s going to be a day where headlines will dominate, which could mean a morning gap, some early-afternoon fireworks, both or neither. The best way to manage risk is to maintain stops at all times, so my intention is to participate in the action via day trades rather than adding more overnight exposure. I expect more setups to arrive soon, but for now I’d like to see the dust settle from all this scheduled news and then go from there.
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. Once 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 Wednesday.
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:
ATHR, CMG, MCP, ATW, AA, OAS, KMX, SOHU, PCX, AEM, SFY, CSC, CCME, PENN, GRA, DMAN, BGC, JACK, BXP, CAR, UAL, FCX, BYD, SONC, CAVM, LCC, BIIB, AMR, SVVS
Bearish Watch:
MS, ICE, AUXL, VFC, PFCB, HAL, MMM, BUCY
The Hit List contains stop and target levels for my swing trades.
