Good evening StockBandits!
Last night I said “Two big trend lines are converging quickly, and I am expecting to see a solid break of one of them take place in the next couple of days, if not tomorrow.”
Well, today that break arrived in the form of a large downside gap and some continuation lower as the day progressed. The indexes attempted to stabilize into the early afternoon, but some additional selling pressure came in to take the market out near its lows by the closing bell.
After hours, the futures are trading lower once again on the heels of bad news out of CSCO, indicating we could see another downside gap tomorrow morning.
Ideally, the break would have happened naturally (no gaps) and given an opportunity to hop on board on the short side, but about 2/3 of today’s move happened overnight. Regardless, it is a technical sell signal for the overall market, reminding us to raise cash and reduce long-sided risk.
It’s tough to chase the short side here as well, so my plan for tomorrow is to primarily sit tight and focus on just a few names. Today’s selloff damaged many bullish charts which had been building, so there’s not much available for trades tomorrow as a result. I’d like to see the dust settle once this initial selloff finds some stability, and reassess at that time. There are a few trades I’m eyeing for tomorrow, but I’ll keep the ETF’s in mind alongside them for possible trade candidates if the market continues to move.
Be sure to catch my post from mid-day today regarding patience and waiting (scroll down), as there are some good reminders for the current environment.
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: GOOG, GS, RDC, ARUN, AGO, CF, HAR
Swing Trading Candidates:
NONE TONIGHT
Bullish Watch:
BAX, AGO, NXTM, CF
Bearish Watch:
MHS, NEM, TIF, RTN, GS, WCC, WHR, CSC, GOOG, LLL, APOL, FO, ESI, FSLR, NUE, BBT, HAR, GOLD
The Hit List will be coming out soon with discussion on open positions and swing trade stops and targets, so be sure to watch for it.
