The Stock Market Health Indicators are in positive territory. This means I am willing to deploy capital to swing trades. Trades have been working out well recently, which is another favorable sign. It is still earnings season, so be alert for that. I don’t typically hold swing trades through earnings.
I am currently focusing on trading contraction breakouts. Some of these contraction breakouts are occurring from larger cup and handle patterns due to the recent price decline and then rally back toward the highs in the many stocks.
How the Market Indexes Are Doing
I look at 4 different indexes because they each tell a different story about overall stock market health. The stock market is healthiest, and swing trading stocks on the long side is most profitable, when all these indexes are in uptrends.
They are all in uptrends currently.
Summary: This tells me there is broad participation in the rally. Most stocks are doing well. Not much is being left out which makes it easier to make money on the long side.
State of the Market Health Indicators
The following chart shows the market health indicators I track. They also tell me the condition of the stock market overall, and whether it is a good time to be swing trading individual stocks.
- 73% of S&P 500 stocks are above their 50-day moving average. 66% of all US stocks are above their 50-day moving average. It is generally much easier to swing trade profitably (on the long side) when more stocks are above their 50-day average. These levels indicate tradable swing trading conditions..
- Volume is flat and not a major concern right now.
- The red bars are showing Upvolume divided by Totalvolume on the NYSE exchange. No important values recently. Above 0.9 or below 0.1 are values I tend to watch for.
- The blue bars are the daily percentage movement of the S&P 500. Big moves are associated with downtrends and turning points. Small values are associated with an uptrend. Values of -2 are a warning sign anytime they occur. All small figures recently, which is consistent with an uptrend.
- The blue line is the cummulative NYSE Advance Decline Line. It is moving higher as the S&P 500 and other indexes move higher. No warning signs here.
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Swing Trade Stock Watchlist for Week of Nov. 10 (and beyond)
This is NOT a buy list. It is simply a list of stocks that are forming contraction patterns. I then watch these stocks to see if they form valid entries. Also, since I can’t trade all the stocks on the list (if they were to all trigger), I pick the ones I like best from the list and place orders in those.
There are lots of companies reporting earnings! Know the earnings date before taking any trades.
Lots of the stocks on the list this week. Filter it down using the criteria discussed in the course.
US Swing Trading Stocks Watchlist
140 stock met the scan criteria on the right. There were 128 last week.
TTM – gappy
CCJ – bigger pattern
SD- earnings soon
From last week‘s list:
CDEV – Broke out on Nov 4 after earnings. Still underway near breakout area.
SE – earnings soon. Has to reset.
GSL – earnings soon.
Canadian Swing Trading Stocks Watchlist
99 stocks met the scan criteria on the right. 93 last week.
GLO.TO – would like to see that volume cool off a bit
TCW.TO – under a month currently
FCU.TO – bigger pattern
SYH.V – bigger pattern
PNE.TO – has to move up and consolidate
CCO.TO – bigger pattern
From last week’s list:
BIR.TO – earnings soon
NXR.UN.TO – has to reset
GGD.TO – breakout Oct. 25, still in the entry area. Pretty flat this last year.
UNS.TO – more a range than a contraction, but nice recent consolidation. Conservative target.
TMC.V – weird, but very tight.
ECN.TO – Earnings after close on Nov. 10
CUR.V – Broke out mid-October, popped, but now back near entry.
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. I may take positions in some of these stocks as they trigger, but I can’t trade them all. Which stocks I trade wwill depend on conditions at the time, risk/reward, stock strength, and other factors.