Good evening StockBandits!
Morning weakness led to a test of the May lows in each of the major averages as key levels recently highlighted here were challenged. The buyers stepped in to offer support, at least temporarily, creating an upside reversal with some afternoon strength which lifted the market well off its worst levels of the day. By the closing bell, the DJIA had chalked up a triple-digit advance, although the NAZ remained in the red.
It’s too early at this point to declare a turning point for this market, because one day held at support does not a bull market make. What we do know is that the market had declined considerably from Thursday’s high of last week, and it was likely due for a bounce. With key short-term support levels having been approached, it was a logical spot for bargain-hunters as well as shorts who needed to cover to step in. Whether we see any lasting follow through from here remains to be seen, but for the time being, support is being respected.
With this market so capable of making a big move in either direction from here, and with so few high-quality chart patterns available tonight, my game plan for Wednesday is to keep short timeframes for new trades. This is definitely a market for the nimble, so tight stops and quick profits are the name of the game for those venturing into the fray. Maintain high levels of cash here, and wait to see if this market is able to build on the bounce which started this afternoon. If a lasting rally is to take place, we’ll see a pullback after the initial bounce which will offer much better entries in terms of defined risk.
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: TD, SMH, CSX, OII, QCOR, UNG, AMR, DECK, SWN, XCO, MA
Swing Trading Candidates:
NONE TONIGHT
Bullish Watch:
QCOR, UNG, NGD, XCO, AMR, ALK, HSY, CXO, DECK, SWN, CRK
Bearish Watch:
GPN, DPZ, BIG, DRQ, GMCR, MA
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.
