Good evening StockBandits!
The market melt-up continued today as the NAZ and S&P 500 both added more than another percentage point to the run which started a week ago Monday. I’ve noted here recently that this pace is unsustainable, which it actually is, and yet it’s still going. What’s perhaps so interesting here is that those who have been long are now wondering if a quick trade on the short side is reasonable, while at the same time those who are short are considering caving in and going long just to avoid the daily punishment of being on the wrong side. Clearly it’s a very interesting time right now.
Technically, this ramp has pushed the indexes beyond prior support levels which were expected to serve as at least temporary resistance. However, those areas have been ignored as the buying persists. We’re now not far at all from the May highs which seemed like such a long way off just two weeks ago. This market over the past two months has been alot like springtime weather here in Texas…if you don’t like the conditions just wait a little while, because they’re likely to change.
With the market being extremely extended here, it’s important to be on watch for a potential short-term pullback. That may not evolve into an all-out reversal, but it would be quite healthy after a run of this magnitude and is becoming more likely by the day. Tomorrow morning in the premarket we have economic news with the Nonfarm Payrolls number which could produce a knee-jerk response, and given all the positivity of the past 8 sessions, a sell-the-news reaction isn’t out of the question. I’m sticking with day trades for new positions tomorrow with that in mind, as well as the fact it’s a summer Friday (typically lighter volume) and there are very few quality patterns to choose from in the charts anyway after this rally.
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: ZIP, P, VMC, MOS
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.
