Good evening StockBandits!
Whatever goodwill the market had built up in the past several sessions with the rally from support was completely erased today. A turn lower in the futures in the premarket was based on disappointing economic data, and it set the tone for the entire day. That produced a small downside gap on the open, and from there we saw a series of lower highs throughout the session as nonstop selling hit the tape.
Today’s decline took the S&P right back near support, while the DJIA made new pullback lows from its May high. That kind of a relentless slide after a multi-day rally reminds us that prices can break down much faster than they often rise, and that the market can be quite fickle. It also reminds us that the price action is the best gauge, as last night I noted here that there simply weren’t many candidates out there after a multi-day run. Stocks needed rest at the very least, and that offered some very useful caution for today.
The big question at this point is where do we go now? While I don’t know the answer to that, I will say that today’s abrupt change of direction did more than just some technical damage. Not only did the indexes give back quickly some hard-won ground, but the bulls who have been pressing the long side of late now have escalating doubts. That’s likely to keep things volatile in the short-term, which means we should see some opportunities emerge in the days ahead – in both directions.
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: JDSU, ANV, WDC, WSM
Swing Trading Candidates:
NONE TONIGHT
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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.
