Good evening StockBandits!
A small gap higher this morning set a positive tone, and soon after the open we saw a gradual lift. After the first half hour, the market was able to climb a little higher, but the advance slowed considerably and essentially stocks just held their early gains.
Today’s strength constitutes follow through to Tuesday’s ramp, which is exactly what the bulls wanted to see after a day of rest and digestion yesterday. The S&P 500 is now within spitting distance of a breakout from the wedge, and it wouldn’t take much to produce an upside exit.
The issue is of course the fact that tomorrow is a Friday ahead of a major holiday weekend, with the market being closed Monday. It’s therefore difficult to aggressively buy a break when it’s likely to be accompanied by weak volume, although a break would still be technically significant nonetheless.
For Friday, I’ll be taking a conservative stance in light of the fact that I’m expecting volume to taper off significantly as traders exit en masse with the arrival of Christmas weekend. I’ll be focused on a select few intraday plays as a way to capture some short-term moves while effectively managing risk in what’s likely to be a very light-volume tape.
As a reminder these final days of the year, several other factors are at work which aren’t present the rest of the year. Those include portfolio managers exiting positions and adding others for the year-end books, tax-related selling for this calendar year, index rebalancing and of course declining volume at the end of the year as traders stand aside and tend to other matters (holidays with family and simply taking time off to gear up for 2012). With that in mind, it’s a good time to trade lighter and stay very selective.
My plan is to take next week off, as I have done every year with the exception of 2010. I allow for up to 4 weeks of vacation per year, and have never taken it. This year I have taken just 1 week of vacation, and the final week of the year between Christmas & New Year’s is a great time to rest up and reset for next year. It’s good to spend time with family, reflect on the year, and recharge with some fresh goals for 2012. I highly encourage you to do the same, especially in light of the fact that next week is a 4-day week (market’s closed Monday) and all the unusual items listed in the previous paragraph. So, I’ll return with the next update January 2nd. Merry Christmas to you, and of course if I can help out just shoot me an email or leave a comment here and I’ll be glad to respond, as always!
** If you would like to enroll in the Combo Course at TheStockBandit University, we’re running a holiday special through Friday at midnight (Dec. 23) for $300 off the usual price of $997, making it $697. It’s an excellent course and it’s been incredibly well-received by those who have enrolled. It also comes with a money-back guarantee, so if a deeper trading education is what you need, be sure to check it out before the week ends! Promo code for the discount is 2012.
Here’s the link to get started if you’re interested. **
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: CNW, X, AEM, PANL
Swing Trading (muti-day) Candidates:
NONE TONIGHT
[table “192” 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.
