Good evening StockBandits!
Encouraging news out of Europe regarding financial relief sent stocks screaming higher this morning, with some 90% of the day’s gains coming on the opening gap. We saw the NAZ gap 100 points, the S&P gapped 50, and the DJIA gapped roughly 400 points.
What’s somewhat frustrating (or comical) about moves of this magnitude is that in order to participate in today’s upside, you had to do one of 2 things….(1) buy into extreme weakness prior to the weekend and hope you timed a bounce perfectly, or (2) stay long last week during the utter carnage we saw and endure all kinds of pain before getting a little bit of your money back today. No thanks!
I was pleased to be in cash at the end of last week, and although I didn’t catch today’s gap up, I also happened to make money last week while so many were getting pounded by the relentless selloff. Everything in trading is a trade-off (no pun intended), but for those of us who take it seriously, risk absolutely must be managed. The fact of the matter is that in the current environment, that’s just not very possible on an overnight basis. That means at the moment it’s a day trader’s market, so if that doesn’t include you, don’t worry. The dust will settle and we’ll see some opportunities surfacing again, but right now defense is the name of the tune, so the sidelines are a perfectly alright place to be.
Heading into tomorrow, I see a handful of plays which interest me, but only for day trades. The volatility has become very high very fast, which means that holding overnight carries with it considerable added risk. Today was a perfect example of that. My preference here is to keep my timeframe brief in an effort to manage risk, as individual stocks can turn on a dime without looking back in an environment like this. Once things settle down a little bit, I’ll certainly be looking to add some swing trades.
Please leave your comments and/or questions below if you have any, I always enjoy the interaction.
Here is tonight’s video:
The Bandit Broadcast Video – Click to Watch!
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Video Stocks Discussed: ATW, LLL, ABX, SSRI, F, MON, CAM, BP
Swing Trading Candidates:
NONE TONIGHT
Bullish Watch:
IAG, KERX, SLW, ABX, SSRI, ANV
Bearish Watch:
CF, JOE, MON, F, AGU, CAM, BP, APC, RIG, DO
The Hit List will be coming out soon with discussion on open positions and swing trade stops and targets, so be sure to watch for it.
