Good evening StockBandits!
Stocks zig-zagged in a pretty narrow range today as the market put in some rest with minor pullbacks across the board. Last week’s highs still aren’t far away, although the buyers are taking a breather and allowing some new bases to build on the daily charts of both the indexes and individual stocks.
The biggest reasons for this are the continued uncertainty surrounding Washington and the debt ceiling, as well as the fact we’re right in the thick of earnings season. With the market lingering not far from its highs of the year, the buyers simply don’t yet have a big urgency to commit more capital in such a news-sensitive environment. Once some of the fog clears out, the indexes are poised for an important intermediate-term breakout – provided the bulls want it bad enough to produce it.
With all the unknowns and with it being summertime, we as traders simply have the luxury here of picking and choosing our spots or simply staying sidelined whenever the waters get choppy. Instead of growing frustrated with these kinds of things, it’s important that we remember our primary goal of preserving capital and our secondary goal of making money. When setups aren’t yet plentiful and when the market is doing its best to put in some healthy rest, the best course of action is to allow the patterns to mature or simply stick with an abbreviated timeframe for new trades.
I’m in cash tonight, but maintaining my watch lists, drawing and re-drawing trend lines as needed while waiting for setups to build. They will arrive in due time, but forcing them has historically proven painful in my own trading, so there’s no reason to just dive into trades for the sake of being active. The major indexes aren’t showing great conviction at the moment, and instead are respecting recent highs while they churn beneath those levels.
Be sure to check out today’s blog post on the CROX swing trade. I reviewed how the stock was setting up, how it morphed from a day trade candidate into a swing candidate, and of course how I managed the trade along the way. It offered some unique lessons, so I wanted to point them out.
Tonight I’m going with the written format as I know some of you enjoy being able to skim the setups. 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.
