Good evening StockBandits!
Monday’s action proved constructive even though it lacked volume and momentum, and judging by today’s moves, it was a quiet day put to good use. The indexes needed a breather of some sort after a quick ramp from a test of the February lows early last week, so it was healthy to see.
Today we saw volume return in a meaningful way, accompanying solid advances in price as each of the big 3 indexes pushed to new multi-year highs. I made numerous mentions of the possibility of the last pullback resulting in a higher low, and last week as the market turned higher, I said it looked to be in the process of being confirmed with only a push past the early-April highs being needed to truly solidify it. Today that took place as we also cleared the February highs, and once again the trend in every timeframe is classified as ‘up.’
The bulls have both hands on the wheel of this market, despite plenty of reasons for caution. We’ve seen time and time again how the market shrugs off headlines and concern and powers forward, and that’s what’s taking place here. Earnings announcements have for the most part proven to be encouraging, leaving economic worries and overseas turmoil on the back burner for the time being. So while there may at some point be an end to this run, the fact of the matter for us as traders is that technically we’ve endured a couple of pullbacks just this year and the buyers have prevailed and produced new highs. That’s not the kind of environment I want to be fighting.
While the trend remains up, it still isn’t the kind of momentum-prone market where buying new highs aggressively has been rewarded. So, I’m taking my cues for direction from the indexes (long), but favoring pullback plays for entries rather than breakouts at this point. I’ll continue to work the charts and monitor the earnings calendars (since we’re right in the thick of earnings season this week and next) to ensure I sidestep any surprises. Aside from that, tomorrow is a Fed day with the main event taking place at 2:15pm ET correction: 12:30pm ET, so heads-up for the usual mid-afternoon volatility which tends to surround FOMC announcements on interest rates & the accompanying policy statement.
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: GLNG, MON, NXPI, CLF, BVN, WFT
Swing Trading Candidates:
WFT just pulled back and stabilized at an area above the prior low. That sets up a potential higher-low scenario, so I’m now watching for a bullish event to trigger a buy and get long for a rally from this area of support. That would take place if and when the trend line is cleared at $21.00. As with all swing trades, my stop and target levels for this stock are on the Hit List here inside the Hideout.
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.
FOMC is early today, scheduled for 12:30pm ET – first non-2:15 announcement I recall seeing. Anyway, wanted to notify you as I was mistaken in last night’s video on the time. Make it a great day!