Good evening StockBandits!
Weekend concerns on the heels of a poor finish last week produced an influx of sell orders, which in turn produced a downside gap today on the open. Early weakness was erased, however, as the dip from the low end of the trading range was bought. The averages went slightly positive after about 40 minutes of trading, but that rally was erased into mid-afternoon with a choppy downtrend to new session lows. Once again though, support zones were defended and stocks ripped higher into the closing bell, finishing positive on the day.
To see a downside gap get bought as major support gets reached like we did today isn’t terribly surprising, because after all, we’re still in a trading range. Until it’s broken, we have to expect not only shifts of direction, but also expect the boundaries to get defended. After a pair of harsh declines from last Thursday’s high and then a downside gap, a late-day short squeeze is still somewhat suspect and difficult to trust at this point. The near straight-up move we saw this afternoon smacks of short-covering, rather than the steady accumulation of longer-lasting bounces.
Nonetheless, the lows held again today, and we find ourselves in a similar position to last night, which is that we’re still caught in a wide, sloppy range. Therefore, we must continue to stay on our toes, expect the unexpected, and otherwise protect capital while maintaining abbreviated trading timeframes for new trades. Eventually we’ll see things smooth out, but for now it’s still a market filled with indecision as the summer selloff gets digested.
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: PANL, HANS, JVA, NOG, DLTR, VRA, VHC, TZOO
Swing Trading Candidates:
NONE TONIGHT – 100% cash.
[table “122” 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.
