Good evening StockBandits!
Traders started the day in buy mode this morning with an opening gap to the upside, and nothing changed as the day progressed, leaving the indexes with substantial gains across the board. Whether it was the lack of impact on the exchanges from Hurricane Irene or simply that the weekend allowed traders to assess current conditions, the mood was upbeat and the bounce from August support continued.
The most significant technical event of the day was the fact that the low-level trading range saw an upside breakout today with the creation of new recovery highs off the August lows. While that opens the door to more upside, it’s very important to keep in mind that we’ve become very stretched to the upside over just the past week.
As a matter of fact, the S&P 500 is up over 6.6% just from Friday’s intraday low. So with that in mind, despite the fact we’ve technically cleared short-term resistance with an attempt here at leaving the low-level range to the upside, I’m cautious when it comes to taking new longs for anything but quick trades.
With Labor Day coming next week (actually just a few days from now with a 3-day weekend), the below-average volume we’ve been seeing could quite easily continue.
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: QIHU, GLNG, FSL
Swing Trading Candidates:
NONE TONIGHT – 100% cash.
[table “111” 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.
Jeff: Quick question–How long do you usually watch day trade possibilities (like today, FSL, etc) for a move past the trigger. I know markets can pop mid day based on macro news. Any guidance appreciated.
Mike Morrison
Morning Mike!
What I’ll do with them is just set a stop order (in this case a buy stop) for if the stock triggers, so I don’t have to watch every tick all day if it doesn’t ever get there. I set the ‘time in force’ to ‘day’ so that once the closing bell rings, that order expires. You’re right about the market’s ability to pop, especially lately, so I don’t mind leaving my orders out there. If they never trigger, no problem. If they do, I’m at the screens and I’ll know about it and can manage the trade from there.
Hope this helps!