Good evening StockBandits!
This morning the futures were near the flat line as the opening bell rang, and it appeared that perhaps stocks would put in a day of rest after yesterday’s punishment. That wasn’t to be the case though, as a minor bounce marked the highs of the day just 15 minutes later, before another wave of steady selling hit the tape. The indexes bottomed out early in the afternoon and drifted a bit higher into the bell, but more technical damage was done and the pullback has deepened.
At this point, we are a bit short-term stretched to the downside, particularly considering the sudden shift of direction these past two days. It’s important to remember though, that this is an emotion-based move and that means it could carry farther than what may seem probable. Traders tend to sell first and ask questions later, and that’s what we’re getting right now. We do have several levels of potential support on the way down (former resistance zones during the recent advance), but they may not be respected at all if the selling continues at this pace.
Eventually, we will see a bounce kick in. My aim isn’t so much to catch that bounce (since being early would be costly), but rather to see how it gets greeted. It’ll be particularly important for us to gauge how the next advance is treated. Does it happen too quickly before fizzling out, in a short-covering kind of way? Does it happen slowly and find follow through? Or is it feeble and unable to gather traction? Those questions will soon have answers, but for now this market is correcting and the sidelines are a great place to be – especially with such sizeable gap potential since all attention is on the Middle East. Too much can happen right now while we sleep, so I’m a day trader heading into Thursday’s session.
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!
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Video Stocks Discussed: PXD, OAS, DVN, DLB
Swing Trading Candidates:
NONE TONIGHT
Bullish Watch:
DVN, XEC, MTW, TSO, NXY, PLD, GSM, PXD, BHI, WTI, OAS, ROSE, PTEN, IO, MAKO, MOBI
Bearish Watch:
DLB, CSCO, CSC
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.
