Good evening StockBandits!
With relentless selling pressure now for the previous 8 sessions, the indexes have been annihilated since last week started. “Oversold” is the word of the day, as the pace of the decline simply has become unsustainable. Nonetheless, stocks were greeted with more heavy selling today right from the get-go.
All nearby support has been cracked, and yet so much selling has already been done, one has to wonder who’s left to sell on this particular down wave. Logic would say that those who still have inventory on hand have decided to wait for a bounce, but the problem for them is that the market doesn’t always operate in a logical manner.
Speaking of bounces, I was sure expecting to see one today, but not in the way it occurred. Rather than seeing a weak open and a gap-fill scenario, we simply saw steady selling which shook out more remaining bulls before a gradual lift from the lows set in. Even that wasn’t enough to return the indexes to positive territory, but that might actually be a good thing.
Gradual turns can build momentum, whereas sharp moves tend to reverse. We’ve sure seen a sharp move lower these past 2 weeks, and it may be beneficial for the bulls to not have put together a giant rally today. Instead, traders can contemplate whether today’s minor recovery points to exhaustion, and we could see a little better bounce unfold in the days ahead because of it. That’s no prediction, just one way it might play out.
Tomorrow morning we have the highly-anticipated jobs number, and some disappointment is very likely already priced into that event. It’s also a Friday ahead of a 3-day July 4th weekend with the market observing it on Monday. Typically this is among the lightest volume weeks of the year, so traders could quite easily step away from the screens and head out early after the week it’s already been. Keep that in mind tomorrow, particularly in the afternoon, and stay selective because of it.
I have no interest in adding overnight exposure ahead of the long weekend, and the charts definitely aren’t in shape enough to warrant that anyway at this point. We need to see a relief rally and some stabilization before taking new trades on either side of this tape, so for Friday, my timeframe is once again going to be day trading. The sidelines has been a great place to be this week, so remember the importance of patience in trading.
Friendly Reminder: the market is closed on Monday, so I’ll see you back here with the next Broadcast on Monday evening.
Here is tonight’s video:
The Bandit Broadcast Video – Click to Watch!
–
Video Stocks Discussed: ADBE, GCI, ARBA, L, ADSK
Swing Trading Candidates:
NONE TONIGHT
Bullish Watch:
ADBE, GCI, ARBA, L, ADSK, BID, PWER, PCP, PXD
Bearish Watch:
VXX
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.
