Good evening StockBandits!
The much-anticipated relief bounce finally arrived today, and by comparison to last Thursday’s attempt, this one was valid. A gap up this morning had shorts on the run, and we saw a steady push higher as the morning continued. Mid-day the market held onto its gains, then pushed to new session highs in the afternoon. And although we did see the market give back a few points in the final hour (as it’s so accustomed to doing of late), it wasn’t much and the gains of the day were maintained quite well.
All the steady downside pressure of late has kept traders largely frustrated. Pretty much anyone who understands risk recognized that if you didn’t nail the beginning of the move, it was extremely hard to jump on board and participate on the short side. Likewise, today’s rally reflected that, as yesterday’s weak finish offered no clues we’d gap so significantly today. That made the strong open difficult to buy, particularly since we’ve seen a number of upside gaps get quickly filled, frustrating less-aggressive bulls who had intended to buy the turn.
So tonight, the big question on the minds of most is “how far does this carry?” That’s a valid question, and I’ll cover that in tonight’s video, but another issue is perhaps more important: what happens on the next decline? However far this bounce carries, the next wave of selling is going to tell us the most about the state of this market. If the next dip remains shallow, then there’s a higher shot at these lows sticking. But if the relentless downside pressure returns on the next pullback, then we could easily see this bounce fail like the others in recent weeks. That places the highest importance on the next pullback, and not necessarily the magnitude of the current relief bounce.
** On another note, this week I’ll be at the Trader’s Expo in Dallas. If you’ll be there, let me know! Also, there will be no Thursday evening Broadcast this week.
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: MCO, CDE, TZOO, GLNG, CREE, IDCC
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.
