Good evening StockBandits!
The market flip-flopped around with only minor net changes for much of today’s session, with the main event being the 2pm ET release of the FOMC Minutes. By seeing what was discussed at the last FOMC meeting, the market attempts to jump to conclusions about what may be next. When it broke that there was some talk of a possible QE3, the market caught a bid and went positive. However, the buying cooled off and the pullback from there became another downside reversal. That left stocks limping once again across the finish line at the closing bell, ending right at their worst levels of the day.
We’ve now seen a 3-day pullback, and it’s been somewhat of a sharp one at that. The NAZ has shed nearly 100 points since last Thursday’s high, which is certainly enough to have stripped the market of its overbought status. We also saw volume pick up today, which may signal a bit of an exhaustion selloff. Time will tell of course, but as I’ll point out in tonight’s video, the previous couple of volume spikes on distribution days were followed by bounces. Stated otherwise, I’m leery of being caught short here given the downdraft of the past couple of days, and the impressive strength which preceded it.
In looking though hundreds of charts tonight, again I’m seeing plenty of sloppy price action. The straight-up and straight-down moves of the past several days has allowed very few stocks to base out properly, which is to say about the only plays worth eyeing here are for potential turns after pullback have been completed. That may require a bit more selling first, so as a result I’m taking a focused list into tomorrow’s session.
Capital preservation remains key right now for a few reasons. First, it’s the middle of the summer, which is notorious for lighter volume (which we’ve been seeing). Second, concerns out of Europe are still justified, and the market remains aware and sensitive to that development in this global economy. And finally, the debt ceiling topic is still front and center, and the market will continue to fixate on it until that uncertainty passes one way or another.
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: WLT, HOG, RENN, GGC
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.
