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Good evening StockBandits!
November arrived on Friday, and we saw the usual first-of-the-month strength in the big 3 indexes. Morning weakness was bought, taking the S&P 500, NAZ and DJIA all into the green to start the 11th month. [Read more…]
Last week we saw some new all-time highs created in 3 of the 4 indexes I track, but after that took place, the averages seemed to go their own directions. Small-caps pulled back hard, while the blue chips held their ground. Was it simply healthy rotation, or are small-caps sending a signal?
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 is carving out a bit of a channel here as it respects the high as well as the closing low of the last couple of weeks. This lateral price action can of course make for some choppy days, but it’s been long overdue and it’s finally here, allowing more individual names to base as well.
SP500 – The S&P saw a minor retreat off its high from Wednesday, but overall this index remains very strong and technically in great shape. Should some selling kick in, there’s an unfilled gap to 1733. Otherwise, the current high at 1775 is the level to watch on the upside.
RUT – The RUT saw a hard selloff after setting an incremental new high on Wednesday at 1123. It pulled back all the way to 1087 on Friday before bouncing from the same level it peaked at back on Oct 1. Should 1087 happen to get broken, there’s an unfilled gap down to 1079. The last 3-day dip in this index was in early October and led to a giant rally. Traders won’t quickly forget that as we look at the current dip. Those calling for a top will want to see a bounce fail somewhere beneath 1123.
DJIA – The DJIA made an incremental new all-time high on Wednesday, then pulled back and is now hovering near 15600 – a level it has respected on numerous occasions in recent months. Having just run over 1000 points higher from the October 9th low, this index is entitled to a rest. Bulls just won’t want to see it spend too much time beneath the highs or talk could soon surface of a double-top. Interestingly, the prior high from September was also an incremental breakout which promptly failed, so we’ll see if the breakout last week has a different fate.
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Trade Like a Bandit!
Jeff White
Good evening StockBandits!
The main event of the week took place today with the FOMC meeting conclusion and accompanying policy statement. [Read more…]
Stocks on streaks just draw attention. How many more days? How much farther can it carry? When will it shift?
While those questions may come naturally, reality can bring a variety of answers depending upon the situation. There is no one-size-fits-all answer.
Seeing a stock that’s run a considerable distance, such as FDX right now, invites faders. There’s an expectation of mean-reversion to some degree in the near term after seeing a stock like this run higher in 15 of the last 16 sessions. (That’s just 1 decline in over 3 weeks of trading).
But shorting into strength can be a recipe for disaster. The fact is, momentum is the proverbial freight train – whether up or down – and you don’t want to step out in front of it without a well-defined plan!
Arbitrarily picking a top or a low rarely plays out, but in the case of FDX, there’s a case to be made for a short-term pullback here. Keep in mind, that doesn’t necessarily mean the end of the run. It just means the odds for some profit-taking are elevated. It might defy gravity a while longer, but here’s what I see.
The runup has been impressive, no question. However, the pace of the move has slowed considerably in recent days, which is to say it appears to be losing some steam. The HLC chart shows it, but we’ll take a closer look at the rarely-used line chart in a moment that depicts it even better. Here’s the HLC chart of FDX where it currently sits:
Here’s the line chart, which in this case provides an excellent look at the slowing pace of the FDX rally on day 16:
These types of fade plays require you to stay quick and nimble. There are shorts in pain who are eager to cover on any dip, and those who are enamored with the stock could just as easily aggressively buy more at lower prices. Those two dynamics alone could keep a pullback shallow with a built-in bid.
If you’ve been eager to be a seller of FDX, it looks to finally be stalling out here. Now just watch for some red and don’t overstay your welcome.
Trade Like a Bandit!
Jeff White
Take a trial to our Stock Pick Service to get our trades.
Good evening StockBandits!
The S&P 500 put up its 13th advance in the past 15 sessions today as it again reached for new all-time highs. [Read more…]
Good evening StockBandits!
The major indexes essentially painted inside days on their charts today by respecting Friday’s trading ranges. [Read more…]
Good evening StockBandits!
The bulls maintained their edge last week with modest gains across the board, pressing the NAZ, RUT, and S&P all to new multi-year (or all-time) highs. The strength which has been so persistent since the turn back up from the October 9th low is certainly still present, although we did see it decelerate just a bit. [Read more…]
Last week we saw each of the major averages able to post gains, although the pace slowed noticeably as the current lift from the Oct. 9 low grew long in the tooth. There was a little bit of hesitation and some strength was faded, but the bulls were able to make new multi-year or all-time highs for the NAZ, S&P 500, and RUT. They might be slowing down a bit, but the bulls still maintain the technical & psychological edge for now.
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 saw upside opening gaps get filled on 3 days last week, showing that there is at least some desire right now to lighten up into strength. However, it gained more ground on the week, adding 29 from the prior week. There are a pair of unfilled gaps down below which could get targeted on any weakness. On the upside, this index is now just 1% away from 4000.
SP500 – The S&P challenged 1759 a pair of times last week after a Wed/Thu pause, and added 15 points on the week. The prior high was 1729 and there’s an unfilled gap to 1733, both of which are levels to watch should we happen to see some selling. The short-term, intermediate-term, and long-term trends all remain up.
RUT – The RUT reached for another new all-time high last week at 1121, but twice was unable to close above it. This index only added 3 points on the week, so it was finally able to put in some lateral rest. Should some selling arrive, I’ll be watching 1102 and 1079 as unfilled gaps on the downside which could be eventually tested on a pullback.
DJIA – The DJIA tacked on 153 for the week and was able to put 15400 in its rearview mirror for the time being. Next levels to watch on the upside are 15600 (July resistance) and 15709, the all-time high.
Take a trial of the Stock Pick Service to get my trades.
Trade Like a Bandit!
Jeff White
