Good evening StockBandits!
For a good portion of the day today, it was shaping up to be another day in the red for the market. Early attempts at a bounce failed to gather any steam, and the indexes turned downward at the 1-hour mark, taking the market steadily lower. By mid-day, things stabilized and we saw an intraday foundation build which ultimately paved the way for the afternoon rally which took the market into positive territory by the closing bell. Yet again, the dip-buyers were present and they prevailed, capping off a very solid month for the averages.
As we head into the home stretch known as December, there are a few things to keep in mind that I want to mention here…
First, volume is likely to be erratic and yet still overall somewhat light. With both Hanukkuh and Christmas this month, there are plenty of reasons traders will step away from the screens to tend to family matters and travel. Throw in New Year’s, and we have more than enough reason to trade lighter this month.
Second, there are some year-end cross currents which simply aren’t present (or as strong) at other times of the year. Tax-related selling done in calendar year 2009 allows traders to take losses or gains on next year’s returns, so that’s another factor which plays a role this month which is often not of a technical nature. Institutions (money managers & funds) have had a very nice comeback, not only from 2008 but also a dramatic rebound from the lows set back in March of this year. They’re paid for performance, so with a solid year on the books, they could be quick to book profits if necessary. By the same token, if the indexes stay beneath the recent highs, they will have limited motivation to put cash to work, which means many of them could be less active this month.
Finally, and this is more short-term, we are in a range-bound market at the moment. As eager as I am to finish the year strong, I also must be mindful of the fact that volume of late has been light and price is stuck between resistance and support. For that reason, I’ll exercise patience and selectivity until some better momentum surfaces.
So as the final month of the year arrives, let’s make the most of it but avoid forcing anything if the setups aren’t there. I think we’ll definitely have some opportunities, but discretion will be the key.
Back in video format tonight and at full speed…please leave your comments and/or questions below if you have any, I always enjoy the interaction.
Here is tonight’s video:
The Bandit Broadcast Video – Click to Watch!
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Video Stocks Discussed: CAAS, SEED, NUVA, AXP, MON, LFT, MMM, ADI, ESV
Swing Trading Candidates:
NONE TONIGHT
Bullish Watch:
AXP, MON, LFT, ACL, FDX, REV, PCLN, CAAS, NARA, DLB, MEE, LNCR, HNT, CGA, LNY, TSTC, NTRI, CFN, NUAN, GSIC, V, CLF, DE, HCP, MMM, LCC, TTM, ADI, LZB, SEED, SOLF, ALK, CTRP
Bearish Watch:
WFMI, AYE, CLR, UPL, CERN, FLR, RRC, CRZO, ENER, NUVA, WFR, DTG, UNM, CRL, PEET, TRLG, FO, DBD, ESV, AIG
The Hit List will be coming out soon with discussion on open positions and swing trade stops and targets, so be sure to watch for it.
