Good evening StockBandits!
Traders returned from the weekend skittish and in the mood to raise cash, and for the opening half hour of the day, that’s exactly what they did. The indexes were deep in the red across the board, with the DJIA down triple digits and the S&P 500 hitting the 1173 support shown here in last night’s video.
From there, stocks were able to stabilize and gradually improve as the day progressed. A trading range emerged just above the lows, and later in the day we saw a steady lift erase the majority of the day’s losses, leaving the market down just fractionally by the closing bell.
Today’s action is encouraging in the short term for the bulls, as they saw yet another dip get bought. They still have a long road ahead of them with the indexes still sitting in the lower portions of their short-term trading ranges, but to see support get tested and hold gives them something to build on in the days ahead. Time will tell whether the news flow allows it, as right now there seems to be no shortage of reasons for concern. Nonetheless, the end of the month brings proximity to the end of the year, and that could deliver a decent Santa Claus rally if this market happens to catch a bid.
Tonight there are a number of charts I’m eyeing, as you’ll see not only in the video but also in the expanding watch lists down below. We’re range-bound at the moment, but a little momentum could arrive at any time, so I’m watching for a number of possibilities. During times like this, it’s most important to have some if/then scenarios, rather than try to predict which way things will go. As a trader, I don’t have a bias, I just want to be able to participate once this indecision is resolved.
**As a reminder, my wife & I are expecting a baby in the next 3 1/2 weeks and our first arrived 4 weeks early. So, I may drop off the radar suddenly whenever this baby decides to arrive. If I do, fear not – I will resurface with an update shortly after!
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!
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Video Stocks Discussed: WLT, NOG, X, BTU, BIDU, SM
Swing Trading Candidates:
SM has put in some nice quiet rest over the past couple of weeks after a nice ascent to new highs. This sets up a large pennant pattern and an upside continuation play if the upper trend line gets cleared. I’ll be a buyer if that happens, and will be using $50.00 as a trigger to get long. As with all swing trades, I’ll have my stop and target levels listed on the Hit List here inside the Hideout.
Bullish Watch:
DRIV, CNX, HAL, MOTR, BGC, OAS, WMS, BMRN, PCX, LULU, LYB, WTI, F, JAZZ, CVG, X, SODA, SM, SLW, FCS, WLT, CCJ, NOG, THQI, BTU, NVDA, RIG, AA, TWI, JNPR, BRCM, VMW, APC, OMC
Bearish Watch:
VFC, MIPS, BIDU, MCP, JKS, TRW, FSLR, MOS, CCK
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.
Do you like SM on the short side if the stock breaks the lower trend line?
Hey Peter,
That’s a great question. It would be a pattern failure, which I think is a valid signal to generate an entry. In all honesty though, pattern failure entries aren’t my style so I don’t personally plan to take it if that occurs.
Hope this helps!