All the usual suspects got slammed today – cruise lines, $RCL; airlines $ALK and coal $CNX, all down about 6% from the open.#MarketTiming #SectorTrading #StocksToShort #10KTrade3https://t.co/9esxOUS3u9 pic.twitter.com/DPqxZuuDbe
— The God of Trading (@TheGodOfTrading) October 27, 2020
Again and again, my nifty-50 stock list moves from oversold to overbought and back again to oversold like an ever spinning wheel within the market’s spinning wheel…
And each time there are 40 or more of the 50 stocks on sells, it’s time to sit up and take notice since that is the number that most often signals either the bottom or the beginning of a bottom on each down swing.
I first posted about this strategy in November of 2015, one of the first entries on this blog.
Nothing has changed.
Usually it just takes one day of 40 sells, sometimes two days, to set up the bottom of a swing. Should be noted if it goes more than two days that’s is a warning that something bigger may be in the offing (last time that happened was the start of the Covid-19 bear plunge this year).
This is just an FYI, but it is what market timing and swing trading are all about.
The results can be quite remarkable, in leveraged ETFs like TQQQ, TNA, leveraged sector ETFs like SOXL, FNGU, and, of course, hot individual stocks.
The buy signal is the open of the first day after the Nifty50StockList ceases to have 40 or more stocks on sells. Stops are at whatever price level on whatever is bought based on each trader’s risk tolerance.
On the chart below the 40-plus sells are marked with purple paint bars.