Good evening StockBandits!
The major averages emerged from an indecisive morning to rally nicely into mid-day, but conviction was lacking and it left the buyers uncertain yet again. That evolved into afternoon selling, which completely erased the gains from earlier in the session. In the end, the intraday rainbow-shaped price action left 3 of the 4 indexes in the red (only the NAZ was incrementally positive). There wasn’t much technical damage done though, which leaves the market not far from where it was last night, although the DJIA did undercut the mid-July low.
At this point, we’re still seeing the market grapple with uncertainty – something it absolutely hates. The debt ceiling issue remains front and center, with a slew of individual companies still yet to report earnings for last quarter. Combined with the fact that we’re still caught in a wide trading range, there’s just not much conviction here on the part of buyers or sellers. The good news is that at some point we’ll see the debt ceiling issue resolved one way or another, removing that element of uncertainty, plus we’ll see earnings season come to pass. That’ll remove a bit of the fog hanging over this market, and could lead to some cleaner moves in the weeks to come.
The key is not to force trades when there’s so little to act on for anything longer than a few hours at a time. Conviction brings continuation in the overall market, which is the tailwind individual stocks need in order to create good clean moves. We don’t have that right now, which makes it a bit more tricky to count on lasting moves from most stocks. So, I’ll keep taking the cash-flow trades this market is offering and otherwise continue to monitor my watch lists as setups and bases are built.
We’re still in the middle of earnings season so it’s very important to check the earnings calendars daily for any multi-day trade. I like to check both EarningsWhispers and Yahoo Finance. No matter where you look, just be sure to look and compare multiple sites to help confirm reporting dates for any stock you’re considering holding overnight.
** One other note is that next week I’ll be on vacation so there will be no Broadcasts or site updates. I’ve allowed up to 4 weeks of vacation per year, but in 7 years I’ve never come even close to taking it all. In 2010 I took 1 week off, so this is overdue! I’ll have a weekend update for Monday’s trading session, then will take a week off and return on Monday, August 8th. With the market still range-bound, the continued indecision we’re seeing, the summertime price action, and earnings season, I think it’ll be an ideal time to step away and let the charts do some rebuilding. Plus, it’s good to periodically clear the head and step away from the screens for more than a day or two and then return refreshed and ready to go again. Thanks for understanding!
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: SINA, MOS, MPEL, IPI, PDC, RENN, FIO, GHL, COF, RIMM
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.
