Swing Trading and momentum investing stock pick newsletter and swing trading service.
Good evening StockBandits!
It’s great to be back from a week of vacation, and I hope you’ve fared well in my absence. We had some good times at Disney but there’s no place like home!
Three of the four averages I watch daily hit new highs on Monday, but each have since pulled back. [Read more…]
Good evening StockBandits!
The eerily quiet trading continued today with another narrow-range session as the major indexes painted minimal net changes on slightly improved but below-average volume. [Read more…]
Good evening StockBandits!
I want to start out by saying that if you have in the past served or are currently serving the U.S. via the armed forces, Thank You! I truly appreciate the untold sacrifices made by the few for the benefit of freedom for the many.
Turning to the market, the most exciting part of today’s session was the first 100 minutes as stocks zig-zagged across the flat line without ever committing to a direction. [Read more…]
What had been a quiet week became turbulent on Thursday with nasty selloffs across the board. However, stocks recovered immediately with a snapback rally on Friday which erased the Thursday decline, in some cases almost to the penny. That leaves the major averages range-bound, but gives traders a reminder that anything’s possible in either direction here.
As we head into a new week of trading, it’s time once again to take a look at the indexes and the key levels they’re dealing with. This will impact how individual names move, so it’s where every new trading week begins.
NAZ – The NAZ broke support to fill a gap from October, then lifted big on Friday to finish back inside the range. This makes for sloppy trading in the short term, but continued basing action has now fully digested the October rally, which badly needed to happen. 3966 is the number to watch on the upside, while 3855 is Thursday’s low to keep on the radar. A downside break could bring the next unfilled gap to 3794 into the picture.
SP500 – The S&P fell apart on Thursday, only to recover the same amount (23 points) on Friday to finish at 1770, Wednesday’s closing level. It’s once again within just a few points of new-high territory, with 1775 being the number to watch on the way up. Beyond that, it’s blue sky for this index, but the bulls will need to give it a nudge to exit this high-level consolidation zone.
RUT – The RUT looked poised for a much deeper retracement after Thursday’s break of 1087 support and gap fill to 1079 from October to post its 6th decline in 7 sessions. But with Friday’s arrival came a surprise move right back up to finish 1 point above Wednesday’s close of 1098. It’s now back inside the range with room to move higher or lower to some extent before something technically meaningful happens.
DJIA – The DJIA has tagged 15600 in almost every session for the past 2 weeks. Incremental new highs/lows have plagued this senior index with subsequent reversals, so last Wednesday’s new incremental high looked poised to follow the same playbook when Thursday’s bearish engulfing bar got painted. However, Friday’s rally left this index shy of its intraday high but sitting at a new all-time closing high. The door is open for more upside, but for it to stick in this index we’ll likely need to see some of the others achieve a similar feat (S&P).
Take a trial of the Stock Pick Service to get my trades.
Trade Like a Bandit!
Jeff White
Good evening StockBandits!
The selloff that hit stocks so hard on Thursday was completely undone on Friday with a snapback rally hard enough to give the bears whiplash. The S&P 500, for example, lost 23.34 on Thursday then rebounded 23.46 on Friday in a mirror-image type of reversal. [Read more…]
Good evening StockBandits!
Rotation was the name of the game today as small-caps and techs saw minor outflows while the senior indexes took the baton. [Read more…]
Being a pattern-based trader for most of my stock plays, I care a great deal about the appearance of a chart.
But…looks aren’t everything.
Take this stock, for example. Bull flag pattern. Excellent momentum ahead of the rest phase. Strong upside volume accompanied the rally, and volume has gotten relatively quiet as price moves laterally. That’s all great and exactly what I like to see:
But a closer look reveals a glaring problem: total volume. Before we discuss “the number,” let’s glance at the 5-minute chart just to get an idea of activity (or lack thereof). Note the many dashes. Those are each 5-minute periods where price made no move at all, and in some cases saw ZERO volume! That isn’t the kind of issue you want to be focusing on in trading if you expect to be able to stay remotely nimble:
I’ll reveal the mystery here… WIRE is the ticker. Average daily volume over the past 21 days (1 month) is just over 89,000 shares. That’s just not enough liquidity to consider it to be a tradable stock (and by ‘trade’ I mean be active in it with the ability to efficiently enter and exit). Volume has ramped considerably over the past month, as a month ago it was below 42,000 shares on an average day. So it is moving the right direction, it’s just not ‘there’ yet.
Here’s the point:
Always consider total volume as a key measure of liquidity (bid/ask spread is certainly another). Total volume gives you an idea of just how much involvement there is for any given day. It should be one of the very first things you look at when you pull up a chart.
I don’t want to be a big player in any name – I want someone else making the waves and I just want to be able to hop on for part of the ride. When liquidity is this thin, there ARE no big players! That means price can gap easier intraday, and it takes far less to move the stock in either direction. One poorly-timed market order can run price a few dimes, resulting in awful executions. One decent limit order could spook prices the other way temporarily.
Thinly-traded stocks might have their place, just be sure you stay extremely small if you’re planning to remain active and you want to participate in them.
I share my trades with subscribers all the time, and I only stick with liquid names (usually 500k or heavier daily average volume). Check out the trial if you’d like to kick the tires.
Trade Like a Bandit!
Jeff White
Take a trial to our Stock Pick Service to get our trades.
Good evening StockBandits!
It was another lackluster day for the major indexes with mixed results and minor net changes. Volume improved slightly from Monday’s light levels, and once again we saw morning weakness scooped up by the buyers. [Read more…]
Good evening StockBandits!
Another week, another positive start today as some morning weakness was met with enough buying to leave each of the averages positive by the closing bell. [Read more…]
