Good evening StockBandits!
The long-awaited break from the trading range we’ve been watching for finally took place today as stocks gapped lower and never recovered. The opening prices were down enough to undercut the rising trend lines for each of the indexes, and shortly after we had broken below the lows of the past two weeks as well. The market finished right near its lows of the day, giving us (at least initially) a decisive move out of the range.
The game isn’t over for the bulls yet though. We’ve seen plenty of head fakes before, so bears should be aware tonight that an upside reversal could still occur, despite today’s big technical breakdown. However, now that the period of indecision has been resolved, it’s likely that bounces going forward will get sold as more bulls recognize they’ve been trapped and a more meaningful correction may be setting in.
The DJIA gave up 12,000 with today’s weakness, with each of the averages shedding 1.8%. The NAZ could have been worse, but for the strength in SBUX (up 10%). Regardless, we’ve been looking for a resolution in one direction or another, and today it appears as though we’ve gotten it.
I’m pleased to have been sitting in cash, not only for the indecision of the recent trading range, but also for today’s harsh breakdown which many stocks participated in. If you’re still long anything which has technically broken down, it’s not too late to exit. I’ve always found it easier to book a loss and move on to better opportunities (shorts, sidelines, other buys, etc.) than to fight an uphill battle when a stock has given up important support and puts me in the position of needing a rebound. ‘Wants’ are fine in trading, but it’s the ‘needs’ which can leave your account very vulnerable to damage.
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: OPEN, ULTA, SGI, F, GE
Swing Trading Candidates:
NONE TONIGHT
Bullish Watch:
OPEN, SKH, RPRX, NTES, SVVS, EAT, ULTA, VXZ, SGI
Bearish Watch:
KSU, MGM, MTW, TRW, F, MMI, SPW, BGC, URI, CSC, GE
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.
