Good evening StockBandits!
Following a multi-day bounce from major support (NAZ), the buyers had justification to take a break today. Things started out rather quiet but positive, then leveled off mid-day. As the afternoon progressed, however, we saw sellers emerge to take away not only the entire morning gains, but considerably more.
Seeing the market limp into the close the way it did today will no doubt bring about some concern for those who are long. The fact of the matter is that very few nailed the rebound, so most of those who are long have been long for a little while now – and quite likely from higher levels. With that said, the bounce was a bit of a relief for them (hence the name ‘relief rally’), and they’re now back to doubting their positions.
This pullback is the one that I’ve been eager to monitor, as we all knew the market would at some point bounce. The bounce itself wasn’t what was important, because a stretched rubber band will snap back. Rather, this is the pullback where we find out if those who were putting cash to work over the past few sessions were simply covering shorts, or if the underlying character has again shifted.
Should this pullback bring about an all-out break of last week’s support, that would of course be a failure and therefore another major sell signal. However, if it remains somewhat shallow and the buyers keep it propped up above support, then we may be staring at an opportunity on the long side with a move back up from held support. Needless to say, the next day or two could be quite interesting.
I’m sticking with abbreviated timeframes (ie: day trades) for Wednesday due to the unstable condition of this tape. Today we saw another example of the benefit of that with the short-lived move in VHC, which I’ll point out in the video.
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: VHC, JVA, NVDA, DANG, MCO
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.
