Good evening StockBandits!
The indexes came under further pressure today with a minor gap down which slightly undercut Tuesday’s afternoon low. That was followed by another walk-down decline for the duration of the morning before stocks ultimately stabilized for the remainder of the day. Although the morning lows were held, stocks failed to rally in the afternoon. That gives the appearance of a downside continuation pattern on the intraday chart, which should keep bulls somewhat unsettled for the night.
Breaking an important level like 2600 on the NAZ and turning away from key areas (1258 on the S&P, 745 on the RUT, and 12300 on the DJIA) only to accelerate lower gave some good reasons for caution over the past couple of days. Rather than seeing dip-buyers step in the way they did last Friday, we’ve instead seen bounces get sold since then as traders move to raise cash into even minor rallies. That’s leaving many had-been bullish charts with nothing to build on, while bearish setups have largely been confirmed.
At this point, it’s a tricky spot to go either way. With very little to work with on the long side, the play there is to wait for some kind of oversold conditions to emerge which might spark a quick rally. On the short side, it feels like a chase to get short here knowing that we’ve already seen a steady initial move lower. It’s times like this where waiting is hard to do, yet the prudent approach.
I’ll be eyeing some quick plays for tomorrow’s session, but for the most part there’s not much to hang our hats on. A bit of rest would go a long way towards either carving out some short-term support, or producing some minor bounces which may prove fruitful for shorting once they stall out. We still have higher intermediate-term lows in place, but lower intermediate-term highs in place as well, which means we’re sitting in a wide wedge. Furthermore, neither boundary of the wedge is at hand, so we’ll have to wait for a more pivotal area before looking to become more aggressive in either direction.
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: V, AGP, NFLX, CTRP
Swing Trading Candidates:
NONE TONIGHT
[table “186” 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.
