Good evening StockBandits!
Last night I cautioned that I’d avoid the long side after such a large, V-shaped bounce, and today’s market action validated that stance. We saw 1% declines across the board today, as early intraday trading ranges failed to hold late in the session when sellers re-emerged to leave stocks on their lows by the closing bell.
The daily charts have now bounced big, stopped shy of prior support (turned resistance), and now are starting to head lower. This could prove to be a head-fake dip before a bounce resumes, but at this point the buyers have stepped aside and prices appear vulnerable to another decline. I remain unwilling and uninterested in making new buys here (for anything but inverse ETF’s, which are included in tonight’s video), so my focus here is on the short side due to all the bearish charts and failing bounces.
I won’t be day trading on Friday, as explained in tonight’s video, but there are a handful of swing trades I’m setting up for potential plays. Volatility has returned to the market, so although even a brief rest would go a long way towards creating some new bases, we may not get much of a rest since this market is on the move so much lately. Needless to say, interesting times of opportunity are upon us after a very quiet rally. Make it a great Friday!
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: VXX, FAZ, TWM, SDS, QID, BP, LLL, EL, UNT
Swing Trading Candidates:
LLL sold off hard recently and has only managed a partial bounce since then. That has created a bearish rising wedge on the daily chart, setting up a well-defined entry for me on the short side. A move below the lower rising trend line of the wedge at $89.40 will trigger a short sale for me (stop & target levels are on the Hit List post).
EL rolled over after a failed breakout and in recent days has bounced with diminishing enthusiasm. This created a bearish rising wedge, which if broken at $63, will trigger a short sale for me.
UNT sold off sharply last week and has bounced since then on diminishing volume only a portion of the way back up. A small rising trend line of support has emerged over the past few days, and if that gets broken at $42.20, I’ll be shorting this stock.
Bullish Watch:
BGZ, SKF, SMN, VXX, FAZ, TWM, SDS, DXD
Bearish Watch:
CF, MON, F, LCAPA, PBR, DWA, MTG, AGU, POT, BP, BLK, DO, LLL, EL, UNT, AMG, AVB, PCP, XHB, FO
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.
