Good evening StockBandits!
I’m away from the office for a few days so I’m coming to you in written format. I do like getting to mix it up from time to time, and I know some of you enjoy the ability to skim through the Broadcast as well. Hope you’ve had a great weekend, and you’re ready to make the most of the week ahead!
Last week, we saw the major averages finish mixed and little-changed from the prior week, leaving them with the look on the surface that not much happened. However, we did see short-term lows get tested, and on a closing basis, they were able to hold. That doesn’t necessarily mean the pullback is over, but simply that a rest phase may be starting. Anytime short-term levels are tested and validated, it’s worth paying attention to.
Given that we’ve seen a good pullback from the highs set earlier this month, as well as the fact that many are taking late-summer vacations between now and Labor Day, it wouldn’t be surprising to see the market stagnate a bit here. We’ve seen some short-term levels get carved out which could serve as support and resistance zones, so unless some good momentum surfaces, it could be that we see some healthy basing action in the near term within those boundaries.
All of that hinges on the ability of this market to hold those levels, but I’ll outline them below. If we do happen to see some rest kick in, it won’t be the kind of environment in which we want to get heavily positioned in either direction. Remember, consolidation phases are simply trading ranges, and whenever that’s the case we need to expect limited follow through and more frequent reversals.
As a result, my game plan for Monday is to keep my timeframe short for any new trades, and then re-evaluate tomorrow night if we see support hold again. I’m just reluctant at this point to be adding much overnight exposure in an environment where follow through could be hard to come by in the short term (until we see some expansion to this little range). So, high levels of cash right now look good, as does being hedged or simply trading light until more technical evidence surfaces to become more aggressive.
For tonight, my notes are on the charts below for index levels and potential trades I’m eyeing for Monday.
Please leave your comments and/or questions below if you have any, I always enjoy the interaction.
Swing Trading Candidates:
NONE TONIGHT
Day Trading Candidates:
These are the trades I’m eyeing for potential plays tomorrow. I will not be holding these overnight, and will wait for these levels to be crossed before entering trades.
Bullish Watch:
POT, BIDU, ATK, CF, CAGC, IT, JKS, AUXL, GES, AAP, MELI, AGCO, GMCR, TTM
Bearish Watch:
DLB, LLL, V, CME, BAC, ICE, CEDC, FCN, CECO
The Hit List post will follow shortly with my trade levels for the swing trades.
