Good evening StockBandits!
Minor declines on Tuesday and Wednesday served as reminders of the presence of dip-buyers. With the market having run sharply higher since the first of the month, any remaining shorts were quick to cover into weakness, and bulls with cash on hand were itching to put it right to work.
This morning, we saw a very soft open which left stocks pulling back deeper, opening the door for some more intense selling if the bulls were at all panic-prone. However, the weakness proved to be yet another opportunity to buy, and soon the market had filled its gap and was back into positive territory by mid-day.
Rather than rip right back to new highs though, stocks leveled off and then drifted lower into the closing bell, finishing just slightly negative on the day. We’ve now seen a very shallow 3-day pullback, which is about as good as it gets for the bulls in an extended market like this. Tonight they have grounds for encouragement after avoiding a sharp pullback, so let’s see what they do with it. My hunch is that after a big nonstop run and a very shallow dip, it’s going to take something more significant to damage the confidence of the buyers.
Further rest in this area, or even a slightly deeper dip would be perfectly fine and not a threat to the health of this rally. In fact, it would likely prolong it by offering a potential secondary move higher. Whatever happens, it’s sure to be an interesting environment for the foreseeable future as emotions are running high on both sides of the tape.
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: VCLK, SINA, DISCA, EJ, IMAX, TDC, STP, EXXI, NAV
Swing Trading Candidates:
NONE TONIGHT
Bullish Watch:
FFIV, ASIA, SPRD, MCP, NTES, CHS, KGC, OPEN, PRGO, ORCL, EXXI, STP, TDC, TRW, N, VHC, REE
Bearish Watch:
JKS, NAV, SAFM, TW, VMC
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.
