It took this last week off from swing trading. The market is choppy and not a lot is moving. That said, the S&P 500 is at highs and is actually forming a contraction pattern itself.

This is the pattern I am currently trading in individual stocks.

I do still have some older trades out that are working well, so I benefit if they and/or the stock market continues to rise. And if not, I have limited exposure.

Since the S&P 500 and NYSE Composite indexes are still in uptrends and near highs, I will continue to take long trades as they occur…but I will be limiting my capital exposure. The Nasdaq 100 and Russell 2000 indexes are not confirming the other indexes at the moment which means conditions aren’t ideal. There is also another warning sign, discussed below.

The Complete Method Stock Swing Trading Course covers this strategy more in-depth, as well as some others. It also lays out exactly when to trade four different strategies, and when to take a step back.

The market health indicators are in decent shape, but not firing on all cylinders.

Starting with the top indicator. MMFI is the % of US stocks above their 50-day moving average. It has been declining since mid-Feb, while the S&P 500 has made new highs. That’s not a good thing. Also, the absolute value of 55 means only about half of stocks are in short-term uptrends. That tends to make swing trading on the long side more challenging.

All the other indicators indicate the market is in decent shape.

The scan lists below reveal that there are some good-looking setups out there. I may take some trades, but I won’t be deploying all my capital. Be selective.

US Swing Trading Watchlist

250 stocks on the scan list. About 50% increase from last week. Filtered down to those below.

Raw list. I won’t be trading all of these. Filter for yourself based on reward:risk and quality of the setup when the time comes.

Contracting and Closer to Setup

GBOX – I am in this one from a couple of weeks back. But there is another fresh setup.
SGRY – angled up, and it tends to grind higher, not a jumper.
MARA – Pattern is getting pretty big. Typically not good.
CAI
INMD
SNBR
GPRE

Still Needs to Move Up and Consolidate

None currently

Canadian Swing Trading Watchlist

118 stocks on the scan list. About 15% less than last week.

Contracting and Closer to Setup

None currently

Still Needs to Move Up and Consolidate

AGO.V
PLAN.V
AXE.V – waves up getting smaller.
CMMC.TO
CNC.V
ARS.V
JET.V

By Cory Mitchell, CMT

Want to learn how to scan for and trade these patterns? Know which ones to trade and which ones to leave alone? Learn this strategy and others in the Complete Method Stock Swing Trading Course. 

Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using leverage.