Good evening StockBandits!

Last week we saw a continuation to new correction lows on Monday and Tuesday morning as selling pressure took its toll on the market.  Finally, the rubber band had become so stretched to the downside that a snapback rally then followed with a huge run higher to finish the day on Tuesday.  It was completely given back on Wednesday, however, providing a quick test of short-term support.  The market was then able to bounce on Thursday and Friday, putting some distance between current prices and the lows.

At this point, it’s difficult to determine whether this is simply a dead-cat bounce from deeply oversold conditions, or if it’s actually a relief rally getting underway.  We’ve seen tremendous volatility as fear and indecision leave traders rushing for the exits, then back into stocks, which made for a very wild week of trading.  The bulls have much more to prove before they’re out of the woods, so the coming days and weeks are sure to be interesting.

Aside from the indexes, individual stocks have suffered as well with some huge straight-down moves having taken place.  Since then, some names have seen incremental lifts, but bases and patterns simply aren’t very prevalent right now in the charts.

The biggest key for this market is going to be the next selloff.  If it’s met with buyers at or near the lows of last week, then the market has a shot at stabilizing and starting a recovery of some kind.  However, if we see the lows get taken out on a closing basis, it will be our indication that more downside pressure is on the way.

It’s been quite an emotional move thus far, making it both difficult and irrelevant to determine stopping points on the way down.  Prior support levels have been completely ignored as traders sell first and ask questions later, so if we start to see downside follow through selling, it will again be a guessing game for when and where it stops.

We’ve been in cash here  since July 25th, which was the first day down in a string of 7 straight declines for the S&P 500 which jumpstarted this selloff.  Needless to say, that has not only prevented pain these past few weeks, but it has also provided us with opportunity, available capital, and a clear head going forward.  It’s impossible to put a price tag on that as a trader, knowing so many have suffered both capital and confidence losses throughout this mess.

As more setups emerge in the charts and this volatility contracts a bit, I’ll of course be looking to initiate some positions.  At the moment, however, cash is still a good place to be while we wait to see if the storm clouds will pass.  Volume is backing off as price rises, producing some bearish divergences on charts which are already in confirmed downtrends.  I’ll be watching steep rising trend lines for potential breaks to the downside.

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: MGA, VMED, TCK, VHC

 

Swing Trading Candidates:

NONE TONIGHT – 100% Cash

[table “98” 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!

A gap up open this morning was for the most part held, as initial profit-taking only filled a portion of it.  From there, stocks turned higher to challenge Wednesday’s highs for a few hours.  In the early afternoon, a push through those levels paved the way for higher ground, and the market rallied steadily until the final few minutes of the day when a portion of the gains were erased.

All in all, it was a solid rebound.  While one day does not a new bull market make, it does add validity to this week’s lows for the time being.  The low-level range is still intact at the moment as traders sort out what to do next, and with volatility and indecision still running high, it could continue for a little longer.

I was encouraged tonight to find a few individual names to focus on for Friday beyond the major ETF’s, although that’s still a primary place to look for trades due to the ample liquidity and direct correlation to the market moves.  It’s difficult to imagine, but it’s certainly possible that we see an actual rest day soon where the daily ranges and volume contract considerably.  For now, however, it’s quite a lively tape and there’s opportunity for the nimble.

Overall, it’s still a real mess out there and I’m quite pleased to have gone to cash on July 25th, the day the market started confirming a short-term lower high.  Hopefully that served as a cue for you to avoid most or all of this harsh selloff, despite not seeing a move of this magnitude unfolding so quickly.  Regardless, cash remains the place to be right now, and this is only an environment for intraday traders to contend with.  We will see some good opportunities emerge once the dust settles, but that still hasn’t happened yet with the huge daily ranges we’re still getting.  Be careful out there, I can’t say it enough!

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: MGX, X, XEC

Swing Trading Candidates:

NONE TONIGHT – 100% Cash

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!

Yesterday we saw prices rocket higher late in the day in a highly emotional move as the proverbial rubber band had become too stretched.  That provided some short-term relief for those who have been caught on the wrong side of this market of late, but it also gave us some levels to use as short-term support (if ‘support’ is the right word for it).

The newness of the rally wore off quickly though as today we saw the market gap lower and give back some of Tuesday’s gains in the early going.  The indexes then spent the majority of the day in choppy trading ranges which were relatively tame compared to previous days, and prices darted back and forth in an erratic fashion until the range was broken this afternoon to the upside.  That temporary strength was used for selling, however, and the intraday breakout quickly turned into a breakdown as new lows were made into the closing bell, handing the DJIA yet another decline of more than 500 points.

Volume remained high with today’s action, and the volatility index (VIX) surged higher once again.  Alongside the price action, that reminds us that it’s still a highly emotional environment right now, making the technicals hard to trust for anything but the intraday charts.  Levels can still be identified there, but the daily charts simply show a market fumbling around for support.

Anything is still possible going forward, as we could see stocks scream higher or fall apart further in the days to come.  Another possibility is that we’re trying to carve out a low-level trading range where this market could churn for a little while to digest this move.  That remains to be seen, and the next couple of days may prove critical if support is going to hold in the near term.  However, on numerous occasions in the past after big, fast declines, we’ve seen short-term periods of indecision (trading ranges).  June was the most recent example.

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: SPY, IWM

Swing Trading Candidates:

NONE TONIGHT – 100% Cash

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!

Volatility was the word of the day today as stocks finished considerably higher on a roller-coaster day.  After tanking yesterday and more weakness in the futures last night, the tone shifted positive with a big turn higher and an opening gap to the upside.  The early gap was quickly filled, but then the buyers kept prices aloft into early afternoon.

That’s when things got really interesting, as a huge rollover move took the market well into negative territory ahead of a final-hour short-squeeze to the tune of 625 points.  The initial rebound was met with a few minutes of indecision, but the last 20 minutes of the day saw nonstop buying as the market went out at its highs.

Today’s move represented a 2/3 recovery of Monday’s losses.  While that’s only a partial rebound in relation to the damage of the past 2 weeks, for now it gives us an important set of levels to trade against with today’s lows.  Clearly, we closed a long way off those levels, but as I noted last night here, it’s possible we now carve out a short-term, wide trading range while this market digests this correction and sorts out what may be next.

So for now, the relief rally appears to be underway.  We could see a continued thrust higher tomorrow on the heels of today’s turnaround as some jump on the moving train, but there are still some important things to remember here.  One is that the overall trend is still down – a single day’s rally doesn’t change that.  That means caution on the long side for anything but quick trades (with stops of course in place).

Another big element to remember on the way back up is the number of folks who have been caught on the wrong side of this move.  Those who were long during the trading range or who bought into this downturn are underwater, and thus may become sellers on the way back up.  Just where that occurs we’ll have to wait and see, but it’s one aspect following a market selloff to keep in mind, as the psychological damage shifts the mindset of many.

**One last note is that we will be conducting some maintenance tonight on the server, so if you happen to encounter any site issues, they should only be temporary.  We don’t expect that, but it never hurts to mention it!

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: SPY, IWM

Swing Trading Candidates:

NONE TONIGHT – 100% Cash

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!

It’s nice to be back from a week of vacation, thank you for all the nice emails you sent in response to my taking a break.  We made some great family memories and I’m feeling refreshed and ready to attack this market again.

Speaking of the market, what a week it has been.  Last week we saw the major averages break down in a big way, producing some significant damage on both a technical and a psychological basis.  Key support levels were taken out, and the selling pressure since then has only accelerated.

The charts have nearly all deteriorated when it comes to individual stocks, with some of them now likely to need months to rebuild.  Thursday’s 500-point rout grabbed the headlines, but today’s action was much the same as the DJIA got down 600 points before attempting to bounce late in the session.  As I’ve noted many times before, Main Street is most familiar with that index, and the declines we’ve been seeing don’t inspire confidence.

There’s a sentiment element which can play a role in the short-term price action, and we’re certainly at a point where a big snapback rally wouldn’t surprise anyone.  However, it won’t be for the faint of heart, because it’s likely to be of the flash-in-the-pan variety.  That means it may not last long, and it could quite easily be followed by more selling.

Whether we take out today’s low remains to be seen, but I wouldn’t count out the possibility of this market creating a short-term, wide, low-level trading range in this area.  We’ve seen tremendous damage to the downside, and the easy money for those on the short side has most likely been made on this particular move.  At the same time, the buyers lack trust in this tape, which is to say that the upside could see only limited progress before the bears reload shorts.  With that said, don’t count out plenty of ongoing volatility but some overall indecision in these next couple of weeks.

Today, even after the indexes were down between 5-7% intraday, we saw an afternoon bounce attempt fail to stick.  It was followed by more selling pressure into the close, leaving the indexes at their lows of the day by the closing bell.  With the market so deeply oversold here, many are looking for a bounce which still has yet to begin.

It could be that tomorrow’s FOMC meeting can deliver a reason for buying/short-covering for a quick relief bounce, but overall the trend remains sharply down and it’s going to take more than an oversold bounce (once we get it) to change that.  Stated otherwise, even though this market may put together a bounce, continued caution is still very much warranted after the technical and psychological damage we’ve seen in the past couple of weeks.

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: SPY, QQQ, IWM

Swing Trading Candidates:

NONE TONIGHT – 100% Cash (and happy about it)

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 DJIA suffered its worst week on over a year last week, and that pretty much told the story for the overall price action in the other indexes.  The NAZ shed 100 points and the S&P 500 lost almost 4% as traders fled from stocks for the safety of the sidelines.

Despite the give-back of the market, the indexes still each sit at levels which are above their June lows.  Zooming out even further on the charts reveals that this market remains range-bound in a multi-month trading range.  That’s a huge reminder to us as traders that while the sellers had the ball last week, it’s still a bit of a game-time decision when it comes to which way the market is headed.  Anything’s possible within trading ranges, and reversals tend to be more sudden and frequent whenever that’s the case, and right now that’s where we find ourselves.

Most individual stocks have seen quick ramps higher and sharp pullbacks, all in just a few weeks’ time.  That’s keeping their charts rather sloppy as a result, leaving very few quality bases to trade from.  That makes this really a daytrader’s market, which is fine for those willing to stick solely with cash-flow types of trades.  For others who prefer a multi-day timeframe, there’s little to go with right now given the messy charts, wide-ranging bars, and frequent overnight gaps we’ve been seeing.

We’re still in the middle of earnings season so it’s very important to check the earnings calendars daily for any multi-day trade. I like to check both EarningsWhispers and Yahoo Finance. No matter where you look, just be sure to look and compare multiple sites to help confirm reporting dates for any stock you’re considering holding overnight.

** One other note is that this week I’ll be on vacation so there will be no Broadcasts or site updates. I’ve allowed up to 4 weeks of vacation per year, but in 7 years I’ve never come even close to taking it all. In 2010 I took 1 week off, so this is overdue! I’ll return on Monday, August 8th. With the market still range-bound, the continued indecision we’re seeing, the summertime price action, and earnings season, I think it’ll be an ideal time to step away and let the charts do some rebuilding. Plus, it’s good to periodically clear the head and step away from the screens for more than a day or two and then return refreshed and ready to go again. Thanks for understanding!

In tonight’s video, I’m going to do something a little different since I’m not planning to trade on Monday (or this entire week since I’m on vacation).  Instead of going through my game plan, I’ll cover the stocks on my watchlist in the video so you see the best charts I’ve found and what I’m watching as some of them continue to work on their respective patterns.

Here is tonight’s video:

The Bandit Broadcast Video – Click to Watch!

–

Video Stocks Discussed: SOHU, WLT, MRX, ARIA, RENN, PII, ALXN, CE, RVBD, SLAB, ADTN, RIMM

Swing Trading Candidates:

NONE TONIGHT – 100% Cash

[table “96” 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 major averages emerged from an indecisive morning to rally nicely into mid-day, but conviction was lacking and it left the buyers uncertain yet again.  That evolved into afternoon selling, which completely erased the gains from earlier in the session.  In the end, the intraday rainbow-shaped price action left 3 of the 4 indexes in the red (only the NAZ was incrementally positive). There wasn’t much technical damage done though, which leaves the market not far from where it was last night, although the DJIA did undercut the mid-July low.

At this point, we’re still seeing the market grapple with uncertainty – something it absolutely hates.  The debt ceiling issue remains front and center, with a slew of individual companies still yet to report earnings for last quarter.  Combined with the fact that we’re still caught in a wide trading range, there’s just not much conviction here on the part of buyers or sellers.  The good news is that at some point we’ll see the debt ceiling issue resolved one way or another, removing that element of uncertainty, plus we’ll see earnings season come to pass.  That’ll remove a bit of the fog hanging over this market, and could lead to some cleaner moves in the weeks to come.

The key is not to force trades when there’s so little to act on for anything longer than a few hours at a time.  Conviction brings continuation in the overall market, which is the tailwind individual stocks need in order to create good clean moves.  We don’t have that right now, which makes it a bit more tricky to count on lasting moves from most stocks.  So, I’ll keep taking the cash-flow trades this market is offering and otherwise continue to monitor my watch lists as setups and bases are built.

We’re still in the middle of earnings season so it’s very important to check the earnings calendars daily for any multi-day trade. I like to check both EarningsWhispers and Yahoo Finance. No matter where you look, just be sure to look and compare multiple sites to help confirm reporting dates for any stock you’re considering holding overnight.

** One other note is that next week I’ll be on vacation so there will be no Broadcasts or site updates.  I’ve allowed up to 4 weeks of vacation per year, but in 7 years I’ve never come even close to taking it all.  In 2010 I took 1 week off, so this is overdue!  I’ll have a weekend update for Monday’s trading session, then will take a week off and return on Monday, August 8th.  With the market still range-bound, the continued indecision we’re seeing, the summertime price action, and earnings season, I think it’ll be an ideal time to step away and let the charts do some rebuilding.  Plus, it’s good to periodically clear the head and step away from the screens for more than a day or two and then return refreshed and ready to go again.  Thanks for understanding!

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: SINA, MOS, MPEL, IPI, PDC, RENN, FIO, GHL, COF, RIMM

Swing Trading Candidates:

NONE TONIGHT

[table “95” 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 got slammed today as traders had little else to focus on aside from disappointing economic data and the ever-present debt ceiling debate in Washington.  As the August 2nd deadline approaches, the price action shows a clear picture of buyers being replaced with short-sellers and profit-takers.

Although we’re likely to see a quick rebound in the market once this uncertainty passes, the fact of the matter is that right now it still looms large and the market clearly doesn’t like it.  Trying to trade the short side aggressively for any timeframe outside a few minutes or hours opens the door for increased headline risk, as a resolution to this mess will eventually deliver a sharp bounce.  At the same time, attempting to buy into the weakness could result in simply entering too soon, as another couple of days like today would require a sizeable rally just to return to current levels.

To say the least, it’s a mess out there and there’s little to do until it’s resolved, other than scalping some intraday moves.  The biggest factor right now is patience for navigating this market.  Rather than forcing entries in an attempt to be involved in some way, the best traders are willing to sit on their hands and let the setups build.  We’re still caught in a multi-month trading range, we’re facing a volatile, headline-sensitive environment right now, and there are very few setups worth noting.

My plan is to let this corrective price action run its course, then reassess where the market stands.  Should it find support at a level above the June lows, that would mark a potential higher low and offer up some potential for a push back up toward the upper portion of the range.  However, the jury is still out on that as stocks continue their slide from last week’s highs.

I’m still in cash tonight, and quite content about it.  Getting stopped out of my long swings a few days ago by aggressively raising stops allowed me to lock in some solid gains and avoid all this pain.  I’ll continue to monitor my watch lists for potential swings, but at the moment the market is still so fixated on the news flow that it’s not allowing stocks to create the consolidations and basing action needed for new swing setups.

This will at some point come to pass, but for the time being we have to respect it and I think cash is a great place to be at the moment given all the uncertainty this market is facing.  Stay patient out there, because we will see some good opportunities emerge from all of this.

Tonight I’m going with the written format as I know some of you enjoy being able to skim the setups. My notes and trade levels are provided on the charts below.

Please leave your comments and/or questions below if you have any, I always enjoy the interaction.

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Swing Trading Candidates:

NONE TONIGHT

Day Trading Candidates:

These are the trades I’m eyeing for potential plays tomorrow. I will not be holding these overnight, and will wait for these levels to be crossed before entering trades. Please see the Day Trading Strategy for more details on how I manage these trades.

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

[table “94” not found /]

The Hit List will not be posted tonight as I am 100% cash overnight and there are no new swing trades for Tuesday. The Hit List typically contains stop and target levels for my swing trades.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

Stocks zig-zagged in a pretty narrow range today as the market put in some rest with minor pullbacks across the board.  Last week’s highs still aren’t far away, although the buyers are taking a breather and allowing some new bases to build on the daily charts of both the indexes and individual stocks.

The biggest reasons for this are the continued uncertainty surrounding Washington and the debt ceiling, as well as the fact we’re right in the thick of earnings season.  With the market lingering not far from its highs of the year, the buyers simply don’t yet have a big urgency to commit more capital in such a news-sensitive environment.  Once some of the fog clears out, the indexes are poised for an important intermediate-term breakout – provided the bulls want it bad enough to produce it.

With all the unknowns and with it being summertime, we as traders simply have the luxury here of picking and choosing our spots or simply staying sidelined whenever the waters get choppy.  Instead of growing frustrated with these kinds of things, it’s important that we remember our primary goal of preserving capital and our secondary goal of making money.  When setups aren’t yet plentiful and when the market is doing its best to put in some healthy rest, the best course of action is to allow the patterns to mature or simply stick with an abbreviated timeframe for new trades.

I’m in cash tonight, but maintaining my watch lists, drawing and re-drawing trend lines as needed while waiting for setups to build.  They will arrive in due time, but forcing them has historically proven painful in my own trading, so there’s no reason to just dive into trades for the sake of being active.  The major indexes aren’t showing great conviction at the moment, and instead are respecting recent highs while they churn beneath those levels.

Be sure to check out today’s blog post on the CROX swing trade.  I reviewed how the stock was setting up, how it morphed from a day trade candidate into a swing candidate, and of course how I managed the trade along the way.  It offered some unique lessons, so I wanted to point them out.

Tonight I’m going with the written format as I know some of you enjoy being able to skim the setups. My notes and trade levels are provided on the charts below.

Please leave your comments and/or questions below if you have any, I always enjoy the interaction.

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Swing Trading Candidates:

NONE TONIGHT

Day Trading Candidates:

These are the trades I’m eyeing for potential plays tomorrow. I will not be holding these overnight, and will wait for these levels to be crossed before entering trades. Please see the Day Trading Strategy for more details on how I manage these trades.

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

[table “93” not found /]

The Hit List will not be posted tonight as I am 100% cash overnight and there are no new swing trades for Tuesday. The Hit List typically contains stop and target levels for my swing trades.

Trade Like A Bandit!

Jeff

Good evening StockBandits!

Default fears tied to the unresolved debt ceiling issue sent stocks to lower levels today as an opening gap to the downside reflected the market’s dissatisfaction with the weekend developments.  Friday evening’s headlines set the tone for a weak start today, and the situation simply didn’t improve over the weekend.

It’s interesting how these kinds of events can occur when trading range boundaries are being approached, and it’s one more reason to play things close to the vest until we truly see a technical exit from this range.  We’ve rallied nicely off the June lows, but that left the indexes at the upper ends of their ranges, making them ripe for some profit-taking when the news flow turns negative and uncertainty creeps back in.  Traders have a mindset of “sell now and ask questions later.”

We did, however, see stocks rally off their morning lows, and the NAZ actually went positive by mid-day.  The dip-buying didn’t persist though, and we saw stocks drift back down in the afternoon.

Currently, the market is still somewhat antsy about how this debt ceiling stuff will get resolved, and whether Washington will make a deal before next week’s borrowing deadline of August 2nd.  All politics aside, this market doesn’t seem to be pricing in a U.S. default.  It has seen considerable uncertainty for a while now and remains not far from 52-week highs.  That’s certainly some fuel for the bullish case, but another look at the charts shows we’re still caught inside a range and therefore the buyers will still have to capitalize on that if the news flow turns positive.

While we’re in the range and with some important levels looming not far overhead, it’s a time to stay vigilant and keep positions on a short leash.  I aggressively raised stops over the weekend, and was taken out of all my overnight positions today (3 of them on weakness, 1 at Target 2).  That puts me back to cash for the time being, which isn’t a bad thing to have some solid profits booked.  I’ll of course keep my eyes open for setups which have potential as plays in the coming days, but won’t be pressing the matter with the market so sensitive to the headlines right now.

Tonight I’m going with the written format as I know some of you enjoy being able to skim the setups. My notes and trade levels are provided on the charts below.

Please leave your comments and/or questions below if you have any, I always enjoy the interaction.

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Swing Trading Candidates:

NONE TONIGHT

Day Trading Candidates:

These are the trades I’m eyeing for potential plays tomorrow. I will not be holding these overnight, and will wait for these levels to be crossed before entering trades. Please see the Day Trading Strategy for more details on how I manage these trades.

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

Chart courtesy of TeleChart

[table “92” not found /]

The Hit List will not be posted tonight as I am 100% cash overnight and there are no new swing trades for Tuesday. The Hit List typically contains stop and target levels for my swing trades.

Trade Like A Bandit!

Jeff