Good evening StockBandits!
Yesterday’s bounce carried over into this morning as the market lifted higher in the early going. However, the strength was short-lived, and it wasn’t long before it was completely given back. The indexes trended lower intraday from there, finishing near their worst levels of the day and back below Tuesday’s closing levels.
Today had been shaping up to be a potentially pivotal day, as a continued bounce would have offered further hope of a higher intermediate-term low. Instead, the daily charts of the indexes now have a consolidation appearance following a selloff, which could quite easily bring downside continuation if the lows of the week are penetrated.
All eyes will turn to the July lows if we see this consolidation resolved to the downside. I would expect to see some acceleration in the selling pressure if that occurs, which means the technical picture faces further deterioration in the short term.
With tomorrow being a late-summer Friday, as well as the fact that we have the GDP number in the pre-market, consumer sentiment shortly after the bell, and FOMC Chief Bernanke speaking at 10 ET, the market should have a lot to digest ahead of the weekend. Stated otherwise, anything is possible. As a result, I’ll be focused on just a handful of day trade candidates, waiting for more charts to set up for swing trades in the coming days.
For tonight, my notes are on the charts below for index levels and potential trades I’m eyeing for Friday.
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:
VIT, MAC, CF, NFLX, SLW, IT, MMYT, TSLA, FOSL, PWRD, INTU
Bearish Watch:
LNCR, DGX, MLM, ISRG, RIMM, CBOE, DLB, LLL, MON, V, CRL, VSEA
The Hit List post will follow shortly with my trade levels for the swing trades.
Regarding MMYT, I think it is worth remarking that this trades with VERY large spreads, often 30-50 cents. And it often trades at the bid or ask and not in between. So the usual stop, limit, market orders and large share sizes have not, in my experience, been the way to trade this stock. I’ve traded this a few times over the last 1 1/2 (after your initial posting). Until I really found out how it traded, and how I had to therefore trade it, I had a very, very sick tummy feeling my first time (though I ultimately made a nice profit).
Good point Jon, MMYT does trade thinner than the volume would suggest. Best way to offset that (for me) is to trade smaller and allow some additional room to fluctuate. The broad strength this morning may well mean a gap beyond the trigger, which would negate this one for me as a day trade, but I’m glad you mentioned this.
Have a great day of trading!