Good evening StockBandits!
Sunday night’s late news regarding the killing of Osama Bin Laden spiked the futures higher, but not to a large degree. The S&P’s traded immediately higher by about 1%, and then slid gradually lower through the night. By the opening bell, they were still positive, but only by a few points.
While it’s certainly a big win for the U.S. to have Bin Laden out of the picture, the market likely anticipated this would eventually happen and therefore it didn’t prompt a huge market reaction. When overlaid with the short-term overbought nature of the market after another big run last week, it actually prompted some profit-taking in a sell-the-news response – something I discussed late last night on Twitter.
The indexes reached new session lows in the final hour, but today’s slide was very minor. That could bode well for the bulls, particularly if they’re able to simply allow this market to rest or correct in a shallow fashion in the coming days.
As I’ve noted here of late, trapped shorts + underinvested bulls could quite easily combine for a steady bid beneath this market, which may prevent a major selloff. That’s of course subject to change depending on geopolitical events and the news flow, but barring any new big developments, we might actually see a shallow rest phase here rather than a harsh shift of direction – even with the ‘flash crash’ anniversary approaching this Friday.
A rest phase would also help to continue building the bases which many charts are currently working on. Tonight in looking through many charts, there are fewer which look ready for immediate moves but still quite a few which remain within consolidations and therefore could offer potential going forward.
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: COO, MELI, RCII, MOS, ROK
Swing Trading Candidates:
NONE TONIGHT
[table “35” not found /]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.
