When Is The Russell Going To Wake Up

The Russell 2000 has been trading sideways for 83-days, breadth hasn't been great, but at the same time, it has not been horrible. Maybe the earnings season will be the catalyst to get the Russell out of its dull drum, maybe it will be Brexit, or perhaps it will be the sell in May and go away seasonality.

Here's another view from AlphaTrends.

FANG; Facebook, Apple, Netflix, Google, have been holding up well and doing a great job masking some of the weakness. According to Fundstrat 40 stocks out of the 500 SP500 stocks are responsible for the entire year-to-date gain in the SP500. Half of the entire SP500 gain so far has come from 10 stocks. This is just another reason why it makes sense to hold the index ETFs as core holdings. Here's the article WSJ.

Here are the names on my watchlist today;

I have an interest in these stocks on the long side if and only if they go through yesterday's high plus .10-cents. This single criterion will narrow down the list and get you involved only in the stocks that are on the move. The main drivers of stocks in the short term is momentum and mean reversion. Stocks that have a significant move in the short term tend to rest and move sideways for a few days and then resume higher more often than not. These momentum bursts typically last 1-10 days. 

FLXN is a recent example;

Mean reversion plays are not as easy to play, however, what you are looking for is for a stock down 3 or more days in a row, the buy point is when it goes through the previous day high, PLSE and FMI are two recent examples.

Size and risk management are very important when swing trading, in certain markets one strategy will work better than the other.

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Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463. 

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