Good evening StockBandits!
A gap down open this morning set the tone for the day, and although an attempt at a recovery was staged, it was unsuccessful. Last night, we saw the indexes resting on short-term support and threatening to break down. Today, the existing home sales number in the premarket left traders more interested in raising cash than putting it to work. As a result, we saw a breakdown and a triple-digit decline as the major indexes reached their lowest levels since early July.
At this point, the July lows are the last line in the sand as potential support for this market. The rally up from those levels was sizeable, and it appeared as though a pullback from the August highs could realistically result in a higher relative low for the intermediate term. That possibility still exists, but the buyers have yet to step in. If and when those levels are neared again, we can consider some scenarios which might play out. For now, the short-term trend is down and that means caution and cash are two good things to have.
Sifting through the charts tonight, it’s easy to see that many have already broken down along with the overall market. There is some room before the next technical support is seen, so things could certainly continue to slide. However, on the heels of a 105-point decline in the NAZ in just 4 sessions, I’m inclined to hunt for some long-sided candidates for tomorrow. There are a few out there I’m eyeing, but if the weakness persists, I’ll stick with existing shorts and the Bearish Watch List down below.
For tonight, my notes are on the charts below for index levels and potential trades I’m eyeing for Wednesday.
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:
CMS, MMYT, FOSL, CRM, MMR, NTES, TSL
Bearish Watch:
WHR, WDC, CBOE, LLL, MON, NAV, CECO, CRL, PLCM, CREE, GRMN, FAST, OII, ESRX
The Hit List post will follow shortly with my trade levels for the swing trades.
