October was a historically bad month.
The S&P 500 index ETF “SPY” was down 7.5%, starting the month at $292 and ended at $270. Ouch! This type of market is rare, but when it happens you must have a “go to” game plan for how to trade during the move and prepare for next move.
Fortunately we were ready for the move due to our market breadth analysis and even took some index shorts to profit from the downside move. Those shorts have been covered and now the big question is how do we prepare for the next big move.
Do we go long? Do we short again? Do we do nothing?
At this point nobody has the answers to these questions. Instead of guessing, we must watch price action, stalk upside resistance and downside support levels and monitor market breadth. From this analysis we will be ready to pounce on the next move.
One of my ways to prep for a possible upside move is to scan and filter the best stocks during a rough market.
These stocks make up my relative strength list. Basically, I’m looking for stocks that were green while the market was red.
If we eventually decide that the selloff is over, these are the stocks I will look to trade.
In today’s video, I show you a list of 10 stocks that crushed the market during the October bloodbath. These were some of the best performers in October, rising anywhere from 5-20%. We also go over potential entries for these stocks and what to look for in the market itself that would get us bullish.
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