Good evening StockBandits!
A test of the upside this morning was short-lived as Friday’s rally failed to find follow through. Instead, the market gave back essentially all that was gained on Friday, and we now stand right near Thursday’s closing levels. Pretty quick for a round-trip.
Such is the nature of trading ranges though. We spent another day in the narrow consolidation zone which emerged last week, with short-term resistance levels (which were former support areas) holding once again. Our attention now turns to short-term support levels which aren’t far below, such as 2100 on the NAZ and 1040 for the S&P 500. A breakdown there and a close beneath those areas would likely spark additional selling to test the July lows in short order, so the next few days will be important for the bulls, to say the least.
The one thing today’s action had going for it was the incredibly light volume we saw. Of course, this is the last week of trading ahead of Labor Day, which comes next Monday with the market being closed. That’s historically the trader’s cutoff for summer, as volume tends to improve after that holiday with fall fast approaching. So, it could be that traders are using this week to tend to other matters, like vacations to rest up ahead of the year-end push. Time will tell, but although today’s slide kept the bulls’ confidence in check, technically they can feel slightly better about the lack of downside volume it came with.
We are getting some good back-and-forth action here, which means there’s a pretty significant tug-of-war going on. Once we see a resolution to this short-term indecision, it could lead to a nice move. For that reason, I’m considering plays on both sides of the market tomorrow, while for the most part keeping my timeframes rather brief due to the lack of overall volume.
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!
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Video Stocks Discussed: NFLX, VCI, TSLA, ESI, PAY, EEV, APC, IOC, SEIC, ZMH
Swing Trading Candidates:
ZMH continues to slide without being able to stabilize or bounce for more than a couple of days. Here it’s sitting in a bearish wedge, which if resolved to the downside, could spark another wave of selling. I’m looking to short this stock if the lower trend line at $47.30 is broken. As with all swing trades, I’ll have my stop and target levels on the Hit List here inside the Hideout.
Bullish Watch:
RIG, APOL, ESI, NFLX, TSLA, MCP, VMED, PAY, VCI, EEV
Bearish Watch:
BEN, HRC, ZION, IOC, ATK, LLL, MMM, V, SPN, MELI, CRL, LAZ, ZMH, MLM, PH, OSG, CNX, PRU, LM, SEIC, APC
The Hit List will be coming out soon with discussion on open positions and swing trade stops and targets, so be sure to watch for it.
