Good evening StockBandits!
Last week really proved to be an interesting one, as prices moved all over the map. We saw some big overnight gaps, some of which were filled quickly, and some which remain unfilled. Intraday reversals were commonplace, just as they’ve been in recent weeks, and then we saw a weak finish to cap off what’s been a very poor month for the indexes as they lost about 8% across the board.
The encouraging thing right now is that some support is becoming evident on a closing basis, although the buyers still have a long way to go to prove that they’ll stand behind this market. Continuation – and particularly upside continuation – has not been a common thing lately for this market. For example, the S&P 500 went the entire month without having 2 consecutive advances. That’s not the kind of market which can be fully embraced on the long side. At the same time, the corrections have been swift and sizeable, which makes it tough to get aggressively short when the bulk of the easy money has likely been made on the short side.
All of these factors really reinforce 2 things to me. The first is that timeframes need to be generally brief right now, at least until some follow through becomes a bit more common. The second is that selectivity is crucial right now. With so many sloppy charts to choose from, there really aren’t many high-quality plays to be found at the moment. That narrows down my watch list considerably, and that’s quite alright in a messy environment like the one we’re in.
Heading into Tuesday as we start this 4-day trading week, there are a handful of trades I’m eyeing, as well as some charts I’m hoping to see some basing in. I’ll outline them in tonight’s video.
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: WLL, WAT, CMI, VXX, V, MCO, MTB
Swing Trading Candidates:
MCO has been trending steadily lower for many weeks now, and more recently has put in some rest without a bounce attempt. This stock closed right at support on Friday, so I’m on watch for a break in the coming days. I’ll be going short this stock if it undercuts the $20.25 level, as there’s still room to correct further if short-term support gets broken.
MTB pulled back from its recent high to test an important level for this stock which has served as both resistance and support in recent months. With the short-term trend down, I’m watching for a possible break of support at $78.50. If that break occurs, I’ll be going short as prices head lower in search of buyers.
Bullish Watch:
VXX, VCI, UHS, REGN, APKT
Bearish Watch:
MCO, BIIB, ABX, DO, CNX, V, VAR, PCLN, COV, MA, AXE, MTB
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.
