Good evening StockBandits!
The August lows moved quickly into view last week with a hard decline Thursday and another selloff on Friday. That brought new closing lows for the NAZ, while the other indexes were able to hold narrowly above their lowest closes from two weeks ago.
That not only places great importance on the week ahead of us with the all-important test now upon us, but it also reminds us of the weakness of this market. The relief rally was quick and brief, pointing to the continued presence of sellers dominating this tape. The relentless decline which preceded it offered no opportunity for those hoping to sell on strength, so their chance arrived on the initial rebound which has now failed. Anyone stuck in this market on the wrong side now faces a big dilemma: hope the lows hold, stay long and wrong, or bail out at lower prices.
Given the velocity of the selloff we saw coming off the late-July bounce highs, there’s clearly some urgency on the part of sellers to raise cash right now. We also saw volume expand considerably on Thursday and Friday, again showing more participation on the side of sellers than we had seen in the final 3 advancing bars of the S&P 500. In addition to the failed bounce and current downtrend, that also paints a gloomy picture for those hoping for stabilization.
As usual, anything is possible in the market, but this week is going to prove important – particularly for the bulls if they’re going to defend this area. It’ll be interesting to see and a learning opportunity as we see the VIX approaching 48 once again with fear on the rise.
Once again, in terms of other charts worth noting tonight, there are only a few. Patience remains highly critical right now, so if you’re not seeing what you like out there, preserve capital and stay in cash – clearly there are many who wish they were right now! That’s been a very favorable position for us since closing out the last overnight positions on July 25th.
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: RGLD, CNX, MHK
Swing Trading Candidates:
NONE TONIGHT – 100% cash.
[table “104” 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.
