Good evening StockBandits!
Bears blinked first, which isn’t surprising given they have been knocked back in recent weeks with such a strong market bounce, and today we got a solid lift across the board. The small-caps and NAZ led the way with 1% gains while the blue chips gained about half that. Ultimately, it was a positive day which sets up the bulls for some meaningful exits from their short-term trading ranges.
The headlines of course pointed to positive expectations for a fiscal cliff resolution, although nothing is set in stone yet. In the meantime, traders didn’t back away with the end of the year quickly approaching and tomorrow’s FOMC announcement just hours away.
Even though the RUT narrowly broke out today, we’re still technically range-bound at the moment for the other indexes. While today’s session was certainly positive and strong, it doesn’t give the all-clear signal just yet with the threat of headlines (FOMC + Congress), tax-related selling, window-dressing, index rebalancing, and expected lighter volume as December wears on. There’s still plenty of risk out there even though days like today seem to disregard it, so it’s wise to consider the other side of every trade.
I’m still keeping my timeframes short as a result, and I will be trading smaller as the month progresses. Nonetheless, there are some opportunities out there so let’s get to them.
Tonight I’m going with the written format to change things up a bit from the usual video. I’ll run through a few of the indexes here first, cover some stocks which belong on the radar, and then share some new plays I’m eyeing for tomorrow’s session.
NAZ – The NAZ pushed toward 3040 today but couldn’t quite make it happen, stalling out at 3033 and finishing at 3022. To see 2961 defended by the bulls is definitely positive on the first pullback, but now they need to produce an upside exit from this range in order to build on recent strength.
SP500 – The S&P tagged 1434 today by clearing 1426. This constitutes follow through for the bulls after a 2-week rest which was well-deserved. A strong push past 1434 would bring the highs back into the picture as next resistance.
RUT – The RUT tacked on 1% today, creating another gap in the process. It also closed beyond 833, which was the 2011 high and a key level this fall. Some backing and filling may be in order for this index in the weeks to come, but overall this is a bullish look and bodes well for higher prices.
DJIA – The DJIA finished higher today but couldn’t clear the 13300 zone after easing temporarily past it. That’s a big level for this senior index, so this may be a logical spot to put in some rest.
Stocks to Watch (need more time for patterns/bases to mature):
Plays for tomorrow:
Stocks I’m looking to trade in tomorrow’s session.
EBAY is setting up in a bull flag here after clearing resistance a few weeks ago. A turn up from here would invite new highs.
LULU is sitting at trend line resistance tonight after a recent test of the $66 support zone and a subsequent bounce. A push past the trend line sets this one free with room to run toward the previous high.
EXP is in an uptrend and has simply pulled back within it. A push past the trend line should invite more buyers into the picture.
FB is easing out of the bull pennant it created over the past couple of weeks. This stock had excellent momentum prior to the rest phase, so perhaps it can regain some of that strength with some follow through here.
NOV is still resting just above support and posted a measly $0.10 gain today. A breakdown through the trend line should trigger more sell stops and offer a play on the short side.
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Trades Overview:
This list is a look at our current & potential swing trading positions. Stocks we are already in have “triggered”, while those we are considering for plays have not triggered. Click post title to view print-friendly link.
No changes
Open Position Notes:
No open positions – 100% cash waiting for new entries.
Closed Positions:
No closed positions.
