Today I’d like to suggest you spend some time and look back to 2003 which began the year as a bear market and transitioned to a 4 1/2 year bull market. Look at how the market bottomed, which stocks led the way (hint: the semis led the way in the spring) and then look at the individual stocks and which ones performed the best.
Click here to read Larry Connors’ The Making of a New Bull Market: Themes for Traders and Investors.
What you should also see is the strongest stocks early on, which then pulled back, had some of the best short-term gains when they rallied higher (momentum stocks tend to outperform in the first year of bear to bull transition years). Many of these stocks can be found in the IBD 100 list and also on our PowerRatings list each day (especially focus on the stocks with PowerRatings of 9 and 10 on intra-day pullbacks of at least 3%).
There’s a lot of knowledge to be gained from this exercise. It will allow you to apply many of the pullback strategies we’ve taught over the years on the correct ETFs and momentum stocks.
This is from Larry Connors Daily Battle Plan which he publishes each morning. If you’d like to take a free trial click here, or call 1-888-484-8220 ext 1 to start your free trial today.
Larry Connors is CEO and Founder of TradingMarkets.com and Connors Research.