PowreRatings and the Magic of Mean-Reverting Markets
For several days stocks have been drifting lower. And while this move lower did not result in an overwhelming number of top, high Short Term PowerRatings stocks for short term traders, it did serve to let us know that the time to be aggressively short was ending and that opportunities to the upside were likely to be soon in coming.
It remains to be seen what sort of follow-through to the upside stocks might achieve in the wake of Wednesday’s rally. But what we do know is that oversold conditions have in fact induced buyers back into the market, propelling higher a number of stocks I have suggested short term traders who use Short Term PowerRatings pay attention to.
What were those stocks? Among them were names like Questcor Pharmaceuticals
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PowerRating), which gained more than 6% on Wednesday and was mentioned in yesterday’s column. Also noted yesterday was Towne Bank
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PowerRating) which soared by more than 12%. Even Sunoco Logistics Partners L.P.
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PowerRating) managed to move higher on Wednesday, gaining 3% intraday before pulling back a bit going into the close..
Now is the time to begin rotating out of stocks like these, yesterday’s high Short Term PowerRatings stocks, and begin looking for the next opportunities. And given how close a number of ETFs have come to overbought conditions after just one day of advancing stock prices, it seems like short term traders of stocks and ETFs will not have to wait long for the next round of opportunities to gain from these volatile, mean-regressing markets.
By way of heads up, keep an eye on short or inverse funds that have become oversold as stocks have moved higher. Note also some of the bond ETFs such as the iShares iBoxx Investment Grade Corporate Bond ETF, LQD
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PowerRating) which earned a Short Term PowerRating of 8, and the iShares Barclays 20+ Year Treasury Bond Fund ETF, TLT
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PowerRating), which earned a Short Term PowerRating of 7 as of Wednesday’s close.
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