Good evening StockBandits!
Pre-market strength led to a minor gap higher this morning, but the strength was quickly sold. The opening bars marked the highs of the session for the indexes, and once they went negative, they never looked back. A mid-morning bounce failed to return the market to the flat line, and from there we saw steady selling into the afternoon as the indexes posted 1-2% declines across the board.
As is so often the case in trading, the obvious play rarely tends to work out. That was the concern I expressed here last night with a growing bearish watch list and many stocks looking like their bounces were fizzling out, combined with the expectation of another first-of-the-month advance by so many market participants. Once we saw a little weakness set in this morning, the crowd recognized this day may play out differently than just another rally to kick off the month of March, and by the end of the day we got a significant bearish reversal bar on the daily chart of the S&P.
At this point, things could still remain tricky. The bears still risk a potential trap if new pullback lows aren’t set soon, so all eyes are now on the lows of last week. It’s been quite some time since we saw a bounce which failed, but at the moment, that looks to be the case as we see the first downside follow through in quite a while. If we do see last week’s lows get breached on a closing basis, it would indicate that this market may finally be ready to correct. Either way, cash or short is a good place to be tonight, so it’s important to respect the possibility of some additional profit-taking.
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: TGT, TEX, BGC, POT, ANR
Swing Trading Candidates:
ANR broke down sharply from its January high and has been range-bound since then. Here it’s resting just above support, which if broken, would confirm this post-decline rest phase as a bearish pattern. I’ll be going short if this one breaks $52.10. I’ll have a tight initial stop, as support was briefly broken last week before a bounce, and I’d expect the next break to stick if this pattern is to play out into another leg lower. As with all swing trades, my stop and target levels for this trade are found on the Hit List here inside the Hideout.
Bullish Watch:
OAS, CVE, SKH, COP
Bearish Watch:
ANR, SINA, TGT, AGU, JRCC, IDCC, PAY, RVBD, RAX, CAT, TCK, TIF, MOS, CMI, BWA, DLB, NVDA, ROVI, TXN, MON, FCX, AA, TEX, LULU, F, DOV, JEC, WLT, COH, BGC, POT, FOSL, TRW
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.
Every day watching the daily video is such a good lesson in itself. You have many quick, short comments that fly by, that I rewind, and listen to again, point out the things a seasoned trader like yourself sees, that a less experienced trader misses, like ME… But every day I can look at charts and see MULTIPLE things that I never saw before, through your eyes.I am so thankful to be under your training. Suzi
Hey Suzi!
Thanks so much for the kind words, I sure appreciate them. It’s rewarding to know that even on a ‘typical’ video you’re gleaning some useful stuff. The aim is to equip you to do it yourself, so the rewind/relisten is a great habit to be in as you continue to learn (at the risk of growing tired of my voice!).