Good evening StockBandits!
The pullback/rest phase which started Monday continued today as the indexes spent the bulk of today’s session in negative territory. The downside damage wasn’t significant, however, and was also aided by a late-day rebound from the lows of the session. In the end, the DJIA finished flat, while the other indexes posted modest losses while respecting some key levels.
The pace of this dip should be encouraging to the bulls, as we’ve yet to see a serious change of character. We’re still just a short distance from highs, which is to say we could reach them again quickly if this market catches a bid. For now, the buyers are taking a well-deserved and healthy rest, so there’s no need to force buys while the market stagnates. My list of potential trades for Wednesday is rather limited, and that’s fine with me. I’d rather stick with quality than quantity, so it’s not about having a ton of setups to focus on. There are slow days and busy days, and it could simply be that tomorrow is a day to mark time while this market continues to consolidate. The key is not to overtrade when conditions aren’t very favorable for momentum-type plays.
One thing I noticed tonight in looking through many charts of individual stocks was the number of pattern failures. Several leadership stocks like LULU and MELI broke down from bullish consolidations which had been building, thus negating those patterns. Quite a few others did the same, which cleaned up my watch lists a bit. That’s to be expected in the midst of a rest phase or pullback, and helps us to locate stocks which may be poised to lead the next move. Let me encourage you to keep your attention on those setups which are showing some potential, rather than those which used to perform well.
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: ADSK, MELI, LULU, LPSN, FFIV, JNPR, DTG
Swing Trading Candidates:
NONE TONIGHT
[table “36” 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.
