Good evening StockBandits!
Two weeks ago, the market went down every day as new correction lows were reached. Last week, however, the market climbed every day, and the arrival of the much-anticipated relief rally finally allowed the bulls to breathe a sigh of relief. What was lost in the previous 5 sessions was reclaimed in 4, and the tug-of-war continues.
The big question here is whether a low has been put in or not. Some will be quick to declare it has or hasn’t, but the fact is that nobody knows yet. Only with the creation of a higher low will we know the market has a shot at changing directions for a lasting period of time. As a result, the next pullback could carry considerable importance if it stops shy of the July 1st low. We’ll need to watch the character of the next dip and see if the buyers step in to offer support before really committing to the long side.
Last week’s bounce did come on light volume, and that’s usually technically questionable to see rallies come on lighter volume than the selloffs which preceded them. Realistically, however, it was a holiday-shortened trading week right in the middle of summer, and the volume was in fact heavier than it typically is for the July 4th week. Nonetheless, that’s keeping things a bit murky right now and adding another piece to the puzzle as traders wait to see if this bounce can turn into something more than simply an oversold rally.
The reversal-prone nature of this market continues to keep traders of all timeframes on their toes, and that’s no different with me. We’ve seen streaky moves in both directions, and they’ve all stopped suddenly and shifted the path of least resistance. At some point that will change, but for now, it’s something we must keep in mind and trade with elevated caution. I’ve stuck with shortened timeframes in recent days as a way to participate in some movement while protecting capital, and that’s entirely alright. If this market is going to make a lasting turn, there will be plenty of opportunities to get on board without having to feel like we need to nail the lows.
In the week ahead, we have the start of earnings season (watch the calendars!), as well as options expiration on Friday, and that’s sure to keep things interesting. 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!
–
Video Stocks Discussed: CROX, TSLA, PRU, AMED, NTES, AGP, IVN
Swing Trading Candidates:
NTES has been building a potential rounded low for a couple of months, and has slowly been grinding back up toward resistance. A move up through $34.20 could free this one up for a quick move higher, so I’ll be a buyer for a swing trade if that level is cleared. My stop & target levels will be on the Hit List post.
AGP recently broke important support and has attempted to reclaim it with a bounce, but it’s been unable to. A rising trend line has emerged in recent days, which if broken, would begin another leg lower in the stock. I’ll be looking to short this one if that trend line is broken at $31.90.
IVN has built a rising wedge pattern, and these are generally resolved to the downside. A break of the lower rising trend line at $13.70 will trigger a short sale for me, and I’ll be setting a pretty tight stop and conservative targets on the Hit List for this trade.
Bullish Watch:
NTES, PPO, AEL, DPS, IDT, RINO, BJ, THOR, CROX, TSLA
Bearish Watch:
BYI, AGP, PRU, AMED, CRK, IR, MYGN, IVN
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.
