TheStockBandit.com

Good evening StockBandits!

Following 5 straight weeks of declines, many were looking for a market rebound last week.  Technically, we had seen support levels coming into view which could produce a bounce (NAZ 2705, S&P 500 1294).  Instead, they were undercut and left in the rearview mirror while the market headed south for the 6th consecutive week.

Psychologically, the traders’ mindset of fading streaks was acted on by some in hopes that oversold conditions would revert to the mean.  The action proved to be mean alright, but not in the way those bulls had hoped.  What we saw was more downside pressure until a dead-cat bounce arrived on Thursday.  Even then, a poor finish tainted the rally, indicating that it was not to be trusted.

Friday’s hard selloff put an exclamation point on the week for the bears, as Thursday’s gains were quickly erased and much more.  In the end, the NAZ finished more than 3% lower (S&P down over 2% on the week), ending at levels not seen since mid-March.

The hardest part of this selloff is figuring out what to trade.  Virtually anything which had a bearish pattern in recent weeks has long since left the station and has felt like a chase.  By the same token, very few stocks have been able to maintain a bullish posture at all with all the market pressure, which leaves the watch lists understandably sparse.  The market is still oversold, so we should be on watch for a bounce, but we have yet to see a decent bounce kick in.

The bottom line here is that market corrections aren’t easy.  If a shift to cash (as I’ve noted here numerous times of late) was made, plenty of pain was avoided by you.  If you’ve been caught on the wrong side and stayed wrong, then the market is teaching you a lesson you won’t soon forget.  And if you’re itching to make some trades, it may be best to wait just a bit longer.  We’re going to have some excellent opportunities in front of us, but we need to let this storm blow over first.  In the meantime, shortened timeframes are still best for those interested in participating.

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: VHC, GPOR, WLK, NTES, OPEN

Swing Trading Candidates:

NONE TONIGHT

[table “63” 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.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

Today was the day the long-awaited relief bounce kicked in, allowing the bulls a day off from their recent suffering.  A relatively flat open led to some early indecision, but soon the market turned higher and trended its way higher.

The one thing that didn’t change today, however, was late-day weakness.  We’ve seen that for several straight sessions now, and it’s indicative of traders unwilling to hold overnight longs.  To see that occur again today on a relief rebound certainly doesn’t inspire much confidence though.  If that was the best the bulls have and they can’t even post a single strong finish, it’s little wonder why we didn’t see a big spurt of short-covering as anticipated.

This was an expected rebound, by both bulls and bears.  That, coupled with the poor finish, means we can’t put a lot of weight on it.  The market had become short-term extended to the downside and was due to come up for some air.  And while it’s too early to write off a more intense rally, the fact of the matter is that the buyers are going to have to bring a lot more power in light of today’s pathetic rally attempt.

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: BAS, BEXP, GDP, PDC, COST, FLR

Swing Trading Candidates:

NONE TONIGHT

[table “62” 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.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

Stocks gapped slightly lower this morning, but not enough to really produce the washout-type of exhaustion move this market seems to need.  We spent the first few hours of the day range-bound but in negative territory, but right on cue we saw early afternoon weakness produce more downside follow through, and the market closed just a short distance from its lows on the day.

We’ve seen plenty of streaks before, with rallies and selloffs lasting anywhere from 5-9 straight sessions at times.  While it’s fine for the media to fixate on them when they do arrive, what we have to do as traders is stay on our toes and watch for a turnaround to begin – and it will.  That’s not to say that it will be a lasting reversal, but simply one which is likely to be worth trading.  I say that because the initial part of it at least is going to involve bulls putting cash to work as well as bears rushing to cover shorts into weakness before seeing profits evaporate.

So, the proverbial rubber band is getting rather stretched, and with each passing day the odds for a turn increase dramatically.  We’re through key levels and there’s still plenty of room to slide further – anything’s possible – but the odds for even a dead-cat bounce are getting high after this relentless pressure of the past 6 sessions.

Rather than step out in front of the slide in hopes of catching a turn, the best approach here is to wait for one of a couple things to occur.  One would be an exhaustion gap.  That would be a spooky kind of gap where it brings capitulation-type selling by the remaining holdout bulls.  They’ve endured pain, but on another wave of pressure they finally spit the bit and capitulate.  Another would be the creation of a higher low and higher high on the intraday chart.  Whether referring to the futures (ES or NQ) or SPY/QQQ, at some point we’ll see the tide start to shift with the creation of a higher relative low.  So watch for a bounce followed by a shallow pullback to indicate that.

Personally, I’m unwilling to short anything here and tomorrow will be focused on just a few names.  I’ll cover individual stocks in the video down below, but I’ll of course be involved in the major ETF’s should either of the above scenarios come into play, using a 1% stop to allow for a little wiggle room while still staying disciplined.  And we may slide further again tomorrow, that’s not out of the question, but right here I’m intent on trading the long side once conditions are suitable for a shot at buying.

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: MON, OC, MPEL, CLR

Swing Trading Candidates:

NONE TONIGHT

[table “61” 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.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

Traders have been waiting a few days for a market rebound after several sessions of weakness from last week’s highs, and today we started to see a bit of buying.  The indexes were holding most of the day in positive territory, although not by much and the bounce was anything but impressive.  However, true to its recent form, as the closing bell approached, we saw the selling pick back up.  By the end of the session, the day’s gains were completely erased and the bears posted yet another (albeit small) decline.

That late-day selloff served as a psychological win for the bears, and it reminded us all that we’re still in an environment where bounces are getting sold.  With that said, this market is certainly due for a bounce, and perhaps even a multi-day rally.  It has not been exhibiting the kind of strength that would suggest it’s going to stick and take us straight back to the highs, but the pace of this decline isn’t sustainable and at some point we’ll see a combination of bulls stepping in to buy perceived value as well as the bears covering shorts.

We have yet to see that bounce begin, as evidenced by today’s late-day slide, but it’s coming and we need to stay on our toes and watch for its arrival.  There are still some setups out there which could break down further, so the short side still has a handful of opportunities, but for the most part this wave is likely nearer to the end than the beginning.

In looking through many charts tonight, I realized again just how few setups there are out there right now on either side of the tape.  Additionally, the setups which are present are anything but leadership stocks, so this is still a time when capital preservation and patience should be our goals while we let some of the dust settle.

Last Thursday evening I noted I’d be interested in buying a downside gap on Friday, and we got one.  It didn’t last but a few hours, but it was worth catching.  Tonight I feel the same way, and if we get a gap to the downside tomorrow morning, I’ll be eyeing longs in major ETF’s (IWM, SPY, QQQ) for trades with tight stops, as those could offer the kind of short-term washout-types of moves this market appears to need.  Otherwise with a flat or up open, I’ll continue to move with caution and wait for more charts to build better patterns than they’re currently offering.

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: ARCO, NLSN, PAY, COP, LTD

Swing Trading Candidates:

NONE TONIGHT

[table “60” 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.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

The indexes stayed in pullback mode today to begin the new week as last week’s selling pressure continued.  A pretty flat open was resolved to the downside, and as the day progressed, the market worked its way to new pullback lows from the May highs.

What’s been interesting about this slide is that it’s been persistent.  Last Wednesday when it began, the action was just relentless selling with no real crescendo effect.  Friday morning we saw a gap lower which attempted to fill, but once again late-day selling erased the rebound and postponed hopes for a short-term bounce.  Even with the weekend allowing traders to think rather than simply act, it didn’t curb the selling as it just picked right back up today.

We’re getting to a point where many stocks are getting very short-term stretched to the downside, as are the indexes.  The slide could go further, yes, but at this point taking on new short sales is something where extreme caution is needed due to the likelihood of a bounce increasing by the day.

With so many broken charts out there, swing trades aren’t readily available.  That means my focus remains on preserving capital while seeking to create some cash flow via day trades.  Clearly it’s too late to be shorting much (although a handful of charts still have room), and yet too early to be buying while the weakness persists.

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: CTSH, NUVA, WLK, DOW, COP

Swing Trading Candidates:

NONE TONIGHT

[table “59” 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.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

Traders returned last Tuesday from a 3-day holiday weekend to produce a spirited rally which took the major indexes considerably higher.  The RUT exceeded its prior high with a solid break of a descending trend line, while the S&P 500 cleared a similar trend line and stopped just shy of its previous short-term high.  That buying enthusiasm saw no follow through, however, as the market came under pressure for the remainder of the week.

From Wednesday into Friday morning, we saw steady selling which took the indexes to new multi-week lows.  Thursday night here, I noted that a downside gap on Friday could set the stage for a rally attempt, and that’s exactly what we saw with a poor start after the jobs number and then a few hours of steady upside.  That rally attempt faltered though, as traders showed their unwillingness to hold positions into the weekend and instead dumped shares in favor of cash ahead of the closing bell.  As a result, the market rolled back over and finished closer to its lows of the day than its highs.

At this point, the indexes remain in poor technical shape, having now created new lows with last week’s slide.  At the same time though, we’re getting short-term extended to the downside and a bounce could arrive any day.  While it will be important to see the nature of the bounce when it arrives, perhaps more important will be the next wave of selling.  Should the bounce happen to be brief in duration and relatively sharp, it will indicate more short-covering and less real interest in the long side, which could make it prone to failure.  However, if we see the market able to stabilize a bit and the next pullback happens to be shallow, then the stage may be set for a rally which has more staying power.

In looking through many charts this weekend, one thing is clear:  there aren’t many setups on either side of the tape.  Most anything which had a bearish setup has broken down with all this weakness, and most stocks which had been constructing bullish patterns have cracked as well, negating those patterns.  Cash is still a great thing to have on hand here as the market continues to correct, so I’ll be picking my spots carefully when it comes to new swings.  For tomorrow’s session, my interest lies in just a few setups for quick plays.

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: NUVA, EQT, CIEN, SOHU, DOW, SQNS, ARCO, X, WLP

Swing Trading Candidates:

NONE TONIGHT

[table “58” 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.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

The indexes did their best to get positive today after Wednesday’s slaughter, but on the NAZ was able to post a gain.  Even that was just a few points, while the DJIA, S&P and RUT each finished in the red.  The damage wasn’t much – and the S&P held 1312 – but psychologically it was a win for the bears after so many expected to see a bounce attempt take place today.

All the back and forth of the past several sessions has really kept the charts of individual stocks quite messy.  We saw a multi-day advance which produced some upside momentum in quite a few, but a rest was needed.  Instead of some quiet basing action, the market sold off sharply, bringing those stocks right back to recent levels and negating the progress they had made.  As a result, there aren’t many clean setups out there to focus on tonight.  Sometimes that’s the case, and when it is, we don’t force trades.  We take what the market offers us and wait for better opportunities to present themselves – and they will…it’s a long year.

Tomorrow morning in the pre-market we have the always-anticipated jobs report, and that could produce an opening gap one way or another, depending of course upon how the news is interpreted.  I have no bias with which way we go from here, but if I had to take a shot on a gap fill, I’d consider getting long on a downside gap (via ETF’s).  I say that simply because that could prove to be a short-term exhaustion move, so if we open weak and the gap begins to fill, stay on your toes.  Again though, it’s all going to be a knee-jerk response to the data in the early going, and then we’ll shift our focus to whether or not 1312 can continue to hold.

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: YOKU, SODA, EMC, X

Swing Trading Candidates:

NONE TONIGHT

[table “57” 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.

Trade Like A Bandit!

Jeff