Good evening StockBandits!
The indexes flirted with resistance zones last week, but ultimately made no real progress in either direction. Following the recent run from the March lows, we had seen prices essentially stall out late last week, as the NAZ approached 2802 and the S&P 500 approached 1332 – the prior bounce highs in both cases. Last week, we were able to cross those levels only briefly, but in the end finished just shy of those areas with the market backing off a bit on Friday.
Many are wondering now if the market is starting the process of rolling over. However, despite the weak finish on Friday, volume doesn’t suggest a meaningful change of character at this point. That could certainly still change, but for the time being it appears as though the market is simply putting in some rest. Rest is good, even if it means some short-term choppy price action. It allows new bases to form and new patterns to develop, which should result in some good trading opportunities once momentum resurfaces. For now, we still have some resistance zones to keep a close eye on while we let the market continue to digest the recent run. So long as we don’t see a big acceleration lower or downside volume start to pick up dramatically, this market could quite easily head higher in the weeks to come – particularly given the renewed fear of the bears and return of confidence of the bulls over the past few weeks.
Due to the lack of directional commitment at this point in the overall market, I’m only considering day trades for Monday’s session. The best swing trading tends to be done by trading in the same direction as the overall market, and at this point we’re in a short-term rest phase until further technical evidence suggests otherwise. For that reason, I’ll take new trades on Monday with intentions of grabbing the initial moves.
Tonight I’m going with the written format as I’ve been traveling this weekend, but will return to the usual video format on Tuesday. My notes and trade levels are provided on the charts below.
Please leave your comments and/or questions below if you have any, I always enjoy the interaction.
Swing Trading Candidates:
NONE TONIGHT.
Day Trading Candidates:
These are the trades I’m eyeing for potential plays tomorrow. I will not be holding these overnight, and will wait for these levels to be crossed before entering trades. Please see the Day Trading Strategy for more details on how I manage these trades.
The Hit List will not be posted tonight as I am 100% cash overnight and there are no new swing trades for Tuesday. The Hit List typically contains stop and target levels for my swing trades.
“The best swing trading tends to be done by trading in the same direction as the overall market…” – Agree
No profit in trying to force trades in a non-trending market. There is no volume, and even if the trades start to take off, the market pullss them back and the energy can start releasing down instead of up.
Just like a storm. You wait it out before going out in the boat. There are old traders and bold traders, but there are no old, bold traders.
Good points guys, appreciate the comments! John, you bring in a good explanation of the lack of volume which tends to accompany trendless markets, and I liked the boat analogy! Gotta know when to stay (at least mostly) sidelined in this game, or it will do it for you.