Good evening StockBandits!
Continued concerns over debt issues both abroad and domestic prevented the buyers away this morning, leaving stocks with a downside gap to start the new week. That was followed by additional selling pressure as the major averages slid to new pullback lows from their early-July highs. Prices were able to stabilize somewhat mid-day, which caused some quiet buying in the afternoon. It wasn’t much, but it did lift the market off its worst levels of the day, cutting the NAZ losses in half by the closing bell.
The news flow is combining with the technical pullback right now, and traders generally aren’t showing much confidence on the long side. With economic uncertainties as well as it being right on the front end of earnings season (another uncertainty), everyone seems to be taking a lay-low-and-wait approach. That’s not necessarily a bad thing, as it is a bit of a messy picture right now, but it’s making it more of a day trader’s market at the moment than anything else. Once the dust settles a bit, we should see many more opportunities surface for multi-day plays.
Last night’s plays yielded few entries today as they were primarily long-sided candidates. As such, it was a good reminder to wait for triggers before taking action. Anticipatory plays occasionally have their place, but in foggy conditions they’re more of a gamble and a guess than a worthwhile strategy. Keep that in mind as the market continues to grapple with headline risk and worry. If there’s anything the market hates, it’s uncertainty.
Today’s decline did a little damage to some of the charts which were starting to build some bullish patterns (flags and pennants mostly), but there are still some trying to set up. The key in gauging pullbacks is to see if the pace is accelerating or being maintained. If it’s the latter, then descending trend lines remain valid. If it’s the former, then the pattern is quite easily negated and therefore should be watched for a new setup.
There are only a handful of new setups tonight, but I’ll take them if they go tomorrow. The Hit List still contains a couple of stocks which haven’t triggered as well, so they remain on my list for potential plays and I’ll take them if they cross the entry levels listed there.
Tonight I’m going with the written format as I know some of you enjoy being able to skim the setups. As noted recently, I will be utilizing more written newsletters to compliment the videos. My notes and trade levels are provided on the charts below.
Please leave your comments and/or questions below if you have any, I always enjoy the interaction.
Swing Trading Candidates:
NONE TONIGHT
Day Trading Candidates:
These are the trades I’m eyeing for potential plays tomorrow. I will not be holding these overnight, and will wait for these levels to be crossed before entering trades. Please see the Day Trading Strategy for more details on how I manage these trades.
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The Hit List will not be posted tonight as I am 100% cash overnight and there are no new swing trades for Tuesday. The Hit List typically contains stop and target levels for my swing trades.
