Swing Watch List Update 2/1/11

Swing stocks resume course.  
After a shaky Friday, the market returned to normalcy in both volume and trend.  Most assumed we would see a validation of the reversal down we saw on Friday, but noooooo. Instead, the market held its ground and even finished with a nice end-of-day push. As a swing trader, you may have been shaken out of many of your positions just to see them trade back up today.. crazy frustrating.  However, honoring stops is about preventing a disaster and keeping yourself in the game.  Don’t think of it as a lost opportunity.  What if the market did continue down today? You would be in a big hole. Instead, you were stopped out and today was a new day to buy in at a discount.  Never leave your stop rules because you think it prevented you from winning.  
Ok, let’s talk stocks. Obviously, with the unrest in Egypt, oil stocks are strong – end of story. That is the strength right now.  Yes, others performed well today, but pretty much ALL oil stocks moved today as the oil futures pushed higher and continue to do so.  One thought on oil – you might want to consider focusing on U.S. or Canadian companies. They are less exposed to any issues that might blow up overseas. Also be careful chasing oil.  If Egypt calms down significantly, a small pullback after today’s oil sector pops is possible. 
The Swing Watch List has been updated.  Keep in mind that swings are tricky when the market is choppy.  Be selective and find trends with volume support.  Watch the SPX.  As long as it stays above SMA20, there is support for an overall bullish market. Also keep an eye on the ISM Manufacturing number. The report is set for 10am eastern time (58.2 forecast).  This number will likely shape a lot of the action tomorrow. 



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