Swing Trading Strategies & Stock Picks Since 2003

This is an extremely difficult market for me to interpret.  The QQQQ completed the 3rd day of a short term up-trend, and the QQQQ completed its first week back above its 10 week average.  There were 6 new highs and 25 new lows in my universe of  4,000 stocks on Friday.  The last time there were more than 100 new highs was September 19, 2008.  And there are very few stocks that have recently hit a new high and continued climbing.

The GMI is at 1(of 6), and the more sensitive GMI-R is at 4 (of 10). 

On the other hand, 94% of the Nasdaq 100 stocks closed with their MACD above its signal line, a testament to the recent strength of the QQQQ.  With the T2108 at 38%, the market is no longer severely oversold, but it could still move up. Note that the QQQQ has been above its 10 week average for one week, while the SPY has been below it for 10 weeks.  Unlike the QQQQ, the SPY contains financial stocks. …..

My students are learning to trade long and short positions in the virtual trading class competition.  It is noteworthy that most of their portfolios are under water since the competition began a few weeks ago.  This market has been whipsawing everyone as the indexes go back and forth above and below the key moving averages.  For those of us trading real money it is probably best to remain on the sidelines, mainly in cash.

Nevertheless, there are a few IBD100 stocks (on my past lists) that are very close to their all-time highs and bear (pun intended) watching:  NFLX, GMCR, TNDM, MNRO and AZO.  I own some of these and am impressed by any stock that can come through the current market environment trading near its all-time high. Nicolas Darvas showed that this was a key characteristic of the winning stocks that enabled him to trade his way to a fortune in a bull market environment . Oh, that we had a bull market to sustain these stocks……

• gmi: 1
• gmi-r: 4
• t2108: 38