Good evening StockBandits!
Thursday’s weak finish pointed to a possible rollover move in progress for the market, and that became a full-fledged reality on Friday as the indexes showed weakness the entire day. Early selling pressure brought a downside gap in the morning, which was quickly followed by further declines. By the closing bell, the indexes had each shed 1.5% to 2%.
It was a very interesting week, starting out with massive gaps on Monday, some additional strength on Tuesday and Wednesday, and then a hard selloff on Thursday and Friday. Overall the indexes were net positive, but the poor finish leaves the bulls once again looking vulnerable to additional damage.
This secondary selloff was somewhat to be expected after the large V-shaped rebound we saw, but now some big questions will surface, like “will the May lows hold?” It’s too early to know for sure at this point, but it certainly appears that this market has just carved out a lower high on the daily charts of each of the indexes, and that spells caution on the long side until some stability is seen.
On another note…. Thank you to those of you who have expressed concern for my son with his surgery on Friday. The procedure went well and he’s recovering extremely well. It was a planned operation, and wasn’t expected to be complicated, but when it’s your child they’re operating on nothing seems minor! Again, thank you very much to those of you who checked in on me over the weekend – all is well.
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: PHYS, GOLD, GMCR, HSNI, PNRA
Swing Trading Candidates:
NONE TONIGHT
Bullish Watch:
PHYS, SLW, ABX, GOLD, TWM, DXD, PAAS, GG
Bearish Watch:
GMCR, CF, F, RTI, FAST, CECO, LLL, EL, UNT, PH, WCC, HSNI, AVB, PCP, ATLS, CNX, SHLD, PNRA, TRN, BIG, VMC, GBCI, BEZ, JLL, HSC, LYV, NIHD, VNO, ORLY
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.
GMCR will split 3:1 after close on Monday, new shares trade on Tuesday morning. I sometimes see a pop in stock price after the split since new people can get in at a lower price (see BIDU last week). So, I’d say a short on Monday is risky, and certainly holding overnight is very risky. This might be an interesting time to buy options as stock equivalent, since we are near the end of the current option month so time premium is small, but with VIX high, the implied volatility is probably high (and you can tell I am not an options trader).
Thanks Jon for the info, I didn’t realize they were set to split.
However, I don’t view a short on Monday as risky, given that I’m only looking at it as a day trade. If the stock triggers, it has ample room to tumble. If it never triggers, then no risk will be taken.
Again, it’s trending lower and I’m only looking for a quick move lower, so I still see the technicals as being favorable for a short-term trade. Down is the path of least resistance at the moment.