Good evening StockBandits!
With the markets in crumble mode last week and in massive-relief-gap mode yesterday, some indecision seemed fitting today and that’s just what we got. A morning gap to the downside seemed small compared to recent days, although it was sizeable compared to the minor gaps we were seeing just a couple of weeks ago. Nonetheless, it was filled as the market ran well into positive territory today, only to stumble in the afternoon and finish not far from Monday’s closing levels.
Despite the lack of progress, today’s bar was definitely helpful for the charts of many individual stocks which are badly in need of some rest and consolidation. More time is needed to really create some high-quality patterns in most stocks, but every day of indecision counts in an environment where prices have been zipping back and forth with tremendous velocity.
The inability of the indexes to hold onto their gains left the daily charts with the appearance of a failed bounce in progress. Prices have only recovered partially from last week’s damage, and former support is still above current levels (now resistance). Combine that with the fact that many traders were simply caught off guard without a chance to sell into the extreme weakness, and the case for selling rallies for the next little while can easily be made.
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. Many stocks are beginning to consolidate here, but most of them still need additional time before they’re ready for multi-day plays (as determined by pattern maturity and the ability to manage risk appropriately on an overnight basis in a volatile environment). 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: NTRI, MTG, BP, RYL, HP
Swing Trading Candidates:
NONE TONIGHT
Bullish Watch:
NTRI, NFLX, KERX, SSRI, CYN
Bearish Watch:
MON, MEE, F, MTG, DCTH, BP, DO, ATW, LLL, UFS, BEAV, TWC, EL, UNT, ACL, GS, APOL, RYL, BKE, PH, AMG, HP, RDC, HSNI
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.
