Swing Trading: In a World of Emotional Markets, the Data-Driven Trader is King
Heading into trading on Tuesday, traders will be confronted with markets that are as oversold as they were heading into trading on Monday. The question is whether or not news from Washington will encourage traders to begin buying, or to resume selling.
As distracting as politics can be, it is always worthwhile to keep in mind that the swing trading strategy of buying weakness in long term uptrends and selling strength in long term downtrends remains an effective, quantified way to participate in the stock market. It was true during the boom times of the late 1990s. And it was true during the bust in the first few years of the new century. It was true during the credit meltup and meltdown from 2005 to 2009. And it remains true today.
People might fall for the “this time is different” mantra. But the data never does. This is why, at the end of the day, we let data, not personal opinions about politics or politicians, guide our trading and investing decisions.
If you are ready to let objective, quantified data guide your trading and investing decisions, then join Larry Connors this Wednesday for a special introduction to the Fall 2011 Swing Trading College. With full integration of The Machine, this semester’s 10-week session promises to be our most comprehensive trader training program yet.
Click the link below for more details.
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Here are 7 Stocks You Need to Know for Tuesday.
Shares of ^PFE^ closed below their 200-day moving average for the first time since November 2010 in Monday’s session. PFE is among the companies scheduled to make their quarterly earnings announcement on Tuesday.
Up more than 1% ahead of its scheduled earnings announcement on Tuesday were shares of ^COH^. Monday marked the stock’s third consecutive higher close as the stock rallied from a four-day sell-off that had taken COH into oversold territory.
What’s up on a down day? Rallying after multi-day pullbacks took them into oversold territory above the 200-day were shares of both ^AEP^ and ^ANF^. Shares of AEP gained more than 2% after a four-day pullback, while ANF advanced by nearly 3% after falling for three in a row.
Both stocks were among the best performers among those stocks trading above their 200-day moving averages.
Also gaining after pulling back for the past few days were shares of both ^VZ^ and ^CAT^. Both stocks gained more than 1% ahead of trading on Tuesday.
Down three in a row and oversold above the 200-day moving average are shares of ^NFLX^. The stock pulled back by more than 1% alone in Monday’s session.
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David Penn is Editor in Chief of TradingMarkets.com