Good evening StockBandits!
This market is like the weather in the central plains, because if you don’t like it, just stick around because it’ll change sooner than later. Last week we saw the indexes snap back with a vengeance after a 7-session streak of selling which was completed the day after Thanksgiving. Monday brought about a huge gap higher on positive European news and big Black Friday sales reports, prompting shorts to cover and inviting buyers into the market with the prospect of a higher low (vs. October).
The strength persisted throughout the week, with minor rests on Tuesday, Thursday and Friday, but another massive run Wednesday to the tune of 490 DJIA points. In short, to Friday’s intraday high we had seen the NAZ run 9% off its low from the previous Friday. That’s an amazing (yet unsustainable) run, and it sheds some positive light on this market in terms of both sentiment and the technicals.
So where do we go from here? Well, that remains to be seen, but the huge rebound we saw last week puts considerable distance between current prices and the November low, giving this market room to pull back should we see some profit-taking kick in. That could keep the higher low scenario intact, which would be very positive for the intermediate term. In the short term, many stocks are extended and therefore in need of rest, although even a brief pause in this area would likely create a slew of bullish patterns like flags and pennants from which we could again see a lift.
The key for me heading into Monday is going to be sticking with the few setups which are ready for imminent moves, while letting more charts set up for potential plays later in the week. We’re still range-bound right now, so nothing is out of the question, despite the technical improvement with the establishment of a higher low. I’ll keep that in mind as well, and will thus look to trade both sides until we get clear of some key levels one way or another.
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: FFIV, SUN, IOC, CTRP, CF, CREE, BAS
Swing Trading Candidates:
NONE TONIGHT
[table “178” 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.
