Good evening StockBandits!
A downside gap this morning was eventually filled as the indexes worked their way back into positive territory by mid-day. They weren’t able to hold there, however, and the selling pressure returned in the afternoon to make new session lows. The pace accelerated in the final 90 minutes, generating talk of last year’s flash crash just a day before the anniversary of May 6, but in the last half hour, we did see a rebound from the lows of the day into the closing bell.
Today’s move is simply a continuation of the pullback which started with Monday’s upside gap. Prior key levels are being tested here, which gives us some areas to eyeball as potential support. However, it’s important to note that even if those levels get undercut, this is still currently a healthy pullback. Conditions could worsen and change that, but for the time being this is still just a dip within the existing uptrend. Keep in mind, new multi-year highs were being hit at the start of this week.
My stance this week has been to take things pretty easy and let this slide play out. Anticipatory buys aren’t paying off, so it’s best to let some new levels get established and allow some new patterns to form before committing to a direction. Trading the long side within an uptrend and the short side within downtrends is the ideal way to trade, so I have no interest in shorting here. At the same time, we’re still waiting for this dip to get completed, so it still feels early to be getting long for anything but quick flips.
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: GA, WSM, COH, RCII, NVDA, SMH, OCR, SCCO
Swing Trading Candidates:
NONE TONIGHT
[table “38” 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.
New at this, and yesterday forgot one of the main reasons for day trading – not being at the mercy of a market like in a swing trade. Did not understand the movement, but tried to force trades hanging in past resistance points going the wrong way. At least kept 1% stop rule, so not so bad. The cost of education.
Every one of us has paid the ‘tuition’ for education in trading just like you referred to John. It’s never fun, and at times we’ll pay for a ‘refresher course’ when we fail to observe the lessons we’ve been previously taught. Hang in there and stay in the game – that is the KEY. So long as those lessons don’t prove too costly, they can be replaced with better habits and lasting success.