Picking Through The Rubble

Although I am avoiding this market like the plague, it’s always good to look through your watch list to see what’s setting up.  I took a long look today to do some more pruning, my list is getting back down to a reasonable size after getting quite long into the thick of things back in April.  If this is just a pull back before we march higher, the stocks which are holding up best right now forming bases should become the leaders of the next leg of this rally.  I’m not saying we see another leg up, my point is that you should always keep your watch list tight and be reviewing your charts, the market will do what it wants to do, you must always be prepared for any event, even if it goes against your macro thesis, the broader technical picture and or seems very unlikely.

Tonight I’ve put together a list of 21 stocks which I believe are the best of the watch list right now.  These are not necessarily the stocks showing the greatest relative strength on the list, but the ones showing the best technical patterns and risk reward entries over the next few days.  Remember though, in corrective or bear markets, even stocks which show great relative strength and technical setups often fail to breakout.  I am seeing more good setups tonight than I have been over the past few weeks, but that number is still very low compared to what I would normally see in a healthy market.  This is not time to jump head long into this market on the long side.  I think there may be a bounce here which you can play for a few days, but extended swing trading to the long side is not warranted given the severe technical and structural damage which has been inflicted on this market.  The following saying is normally used when referring to merger arbitrage, but I believe trading to the long side right now is like picking up pennies in front of a bulldozer.

That being said, you can find the list of setups with their charts on my chart.ly page.

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