Good evening StockBandits!
After a pair of sizeable downside gaps in the previous two sessions, we got one on the upside today as short-term oversold conditions produced a bounce. Optimism was present for the entire session, although the early gains weren’t built upon and we simply spent the day in another trading range just meandering slightly lower and higher before ending pretty much right where we started.
The FOMC came and went without any real fireworks, and it was actually one of the tamer Fed days I recall seeing since we didn’t even get the usual spikes of indecision once the news was out. Regardless, that’s one event that’s now off the table and the market can return to its fixation on Europe, followed by earnings announcements (which we still have quite a few of).
What the bulls really want to see after a sharp pullback like we saw earlier in the week is some stabilization. Today may have been the start of that, but one day simply isn’t enough to really base that on. Should we hold in this area without giving back much ground, it could eventually be interpreted as a short-term higher low, so we’ll keep an eye on that in the days ahead.
The prevalence of gaps remains, and as short-term traders we have to recognize that and trade accordingly. In the past 5 sessions, we’ve now seen 4 significant gaps. While it’s impossible to know whether that trend will continue for a bit longer or if it was simply a little phase, the fact is that the best way to avoid catching an overnight surprise is to avoid overnight positions. I’ve been doing that, focusing instead on intraday plays. That’s still where opportunity lies alongside manageable risk, so it’s where my attention will be on Thursday as well.
Be sure to check out the post from earlier today on Chasing Trades Isn’t Paying, as today offered yet another example of what I discussed in that video post. You can also scroll down on the Bandit Hideout homepage to read it, but I wanted to be sure you saw it. Check out the post and share your feedback on it.
I’ll cover my game plan for tomorrow in the video, and as always, feel free to share your own thoughts, trade ideas, and questions down below in the comments section.
Here is tonight’s video:
The Bandit Broadcast Video – Click to Watch!
Video Stocks Discussed: TWI, BYI, RYL, MCO, WCC, TEX, RCII, ADTN, FTNT, PFCB, SODA, SGEN, GMCR
Swing Trading Candidates:
NONE TONIGHT – 100% cash.
[table “159” not found /]The Hit List is a separate post which contains discussion on open positions and swing trade stops and targets, so be sure to check it for further details on swing trades.
