From the desk of top market trader Mark Leibovit:
Two stories hit the tape morning that impacted gaming stocks, in particular Wynn Resorts (WYNN) and Las Vegas Sands (LVS).Chinese government pledged support to Macau's economy which had been faltering due to previously imposed austerity measures. Li Gang, the head of the Chinese government's liaison office in Macau, said the central government is considering plans to "support Macau's economy in all aspects," according to the South China Morning Post. The government plans to help boost growth in Macau, including the potential approval of the region's maritime expansion plans by the end of the year. The Chinese government is also looking to help the region boost its tourism. Technically, a Leibovit Positive Volume Reversal was formed and was identified INTRADAY and we purchased both WYNN and LVS. Volume was clearly running a pace early in the session that strongly suggested a Leibovit Positive Volume Reversal would be formed. We had been monitoring WYNN and LVS for weeks for any sign a trading bottom might be formed. For example, WYNN had declined from $249 to $50 from March, 2014 to date and was ripe for a huge technical bounce. Looking at resistance in the 50 day, 50 week and 50 month moving averages, upside potential is to 80, 124 and 139, respectively. As a trader, I would be thrilled to get a pop to 70-75 which would represent at 20 to 25 point rally. The bad news. Should the rally fail and using Volume Reversal theory, I would not want to see the October 1 low of 50.96 breached. That would have to be your stop.