Good evening StockBandits!
Last night I mentioned that the initial bounce had yet to fail, and as of tonight’s close that’s still the case – although not by much. Today’s steep decline handed the indexes another nasty blow, not only with the point decline but in how the day unfolded. The morning gap never attempted to fill, and instead stocks slid steadily lower as volume once again spiked compared to the previous couple of sessions. That points to an urgency by those who are doing the selling, and widespread participation in light of the heavy volume. Anything’s possible, but days of distribution which dwarf recent advances don’t paint much of a bright picture for the bulls right now.
It’s not my call to make as to whether the August lows are going to hold, but at this rate, it wouldn’t take long to break them. On top of that, I have a renewed lack of interest in the long side, not only due to the badly broken charts but also the fact that the buyers seem to have no resolve here. Yesterday’s minor rebound from the lows quickly became history and completely forgotten today as the market took another drumming and the bulls headed for the hills.
Last night’s trade setups offered a good couple of lessons today, so I’d like to briefly cover them. HANS held up rather well in the face of today’s decline, but I’ve removed it from the Hit List as it did not trigger today and the overall market is turning ugly again. I’ll revisit it again most likely if/when this market is able to stabilize a bit. APA gapped through my intended trigger, but stayed within my gap rules to justify a smaller position. It made a nice move which was worth catching, particularly with an aggressively-tightened stop this morning (as per the email alert). I’m out with a small gain and back to cash tonight. However, it was a good example of how hard it is to formulate a trade plan in such a slippery market since a gap can change the landscape instantly and require immediate adjustments in order to keep the risk/reward profile in check.
In terms of other charts worth noting tonight, there are only a few. Patience is critical right now, as participation on either side (long or short) is much more difficult when fear spikes and we see 4-6% index moves. If you don’t see what you like out there, preserve capital and stay in cash – clearly there are many who wish they were right now!
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!
Video Stocks Discussed: HANS, SCCO, MHK
Swing Trading Candidates:
NONE TONIGHT – 100% cash.
[table “103” not found /]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.
