Good evening StockBandits!
The indexes got off to a poor start today with some early weakness, but buyers emerged as the S&P 500 tested the 1040 level I pointed out here last night. The NAZ also found support at the 2100 area listed here last night, as did the RUT near 587. Clearly, we aren’t the only ones watching those levels, and today’s respect of those areas adds validity to them.
Today’s weak start and finish in the green – even if it wasn’t a big advance – signals short-term fatigue for the pullback which started last week. How far a bounce carries remains to be seen, but in the short term, I’m still expecting the bounce to at least fill Tuesday’s gap (as mentioned here last night). That would mean a test of the broken support zones from beneath, and would give us a very good idea for whether the upside has any staying power.
It is still a time to remain vigilant and cautious, as anything’s possible. We could see things weaken again in a hurry, and find ourselves facing the July lows in short order. On the other hand, if today’s low is able to hold, it could eventually prove to be an intermediate-term higher low (relative to the July low), which would be a very positive technical event for this market. More time will be needed before we know for sure, but if anything it adds importance to the next few days and weeks of action – even if it’s historically a “slow” time for the market ahead of Labor Day.
I’m looking to maintain high levels of cash for now, focusing primarily on intraday trades with some occasional overnight positions (adding one candidate tonight). The market’s been weak, but it’s starting to bounce, so my watch lists are rather thin at this point. It’s a bit late to be shorting for this particular move, and yet there are very few stocks exhibiting bullish price patterns.
For tonight, my notes are on the charts below for index levels and potential trades I’m eyeing for Tuesday.
Please leave your comments and/or questions below if you have any, I always enjoy the interaction.
Swing Trading Candidates:
INTU jumped higher last week and has pulled back quietly over the past few sessions with declining volume. The breakaway gap has been able to hold on the dip, and this one could regain momentum quickly if it’s able to turn higher from here. I’m watching for a push beyond the trend line at $42.90 to trigger a buy, and will have my stop and target levels on the Hit List for this swing trade.
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:
RINO, WLP, NFLX, SLW, IT, AEO, TSLA, FRG, FOSL, CRM, PWRD, GG, LAZ, ANV, INTU
Bearish Watch:
LLL
The Hit List post will follow shortly with my trade levels for the swing trades.
