Technical Analysis | Stock Market Timing Signals | Top Stock Picks

Please do your own research to verify if these stocks meet your investment criteria, market timing, and technical analysis requirements prior to taking positions in any of these stocks.

Model Portfolio

Fully invested in Cash. 

VTI would need to move above a price of $58.35 in an up-market for consideration to move back into an invested position.

Date 1/12/10

Action: Stopped out at the stop price established at the close of the market on 1/11/10

Symbol: VTI

Purchase Price: 57.38

Selling Price: 57.20

Current Stop:

2010 performance to date:

1/5 through 1/12    -0.3%

Bullish Top Stock Picks (Swing Trade Watch List):

The following stocks have been selected for swing trades.  These stocks are in up trends, have recently reached a new high, and are currently pulling back to their 20 or 40 day moving average.

These stocks are candidates for purchase if the price moves above yesterdays high price, with a stop under yesterdays or todays low, whichever is lower.

See the market timing update for trading strategy.

Stocks certainly took it on the chin today right from the opening bell.  Alcoa announced disappointing earnings after the close of the market yesterday.  Alcoa’s dismal news combined with Chevron’s profit warning and the fact that prices have increased for 6 days straight through last Friday, made a correction a high probability.

The question is will this current pullback remain a consolidation at the current price levels or will a deeper correction transpire?  Technical analysis of the stock charts is not encouraging.

Yesterday, we also mentioned that the weekly chart was having difficulty building upwards momentum from the lower trend line.  In fact, with today’s price drop, the weekly chart is in danger of dropping below this trend line.  Prices are getting perilously close to dropping below the PSAR indicator which would not be good news.  The three momentum indicators are looking weak also.

On the daily chart all three price momentum indicators dropped today.  The stochastic and CCI are close to dropping below zero.  Stock prices dropped below the PSAR indicator which is a prime reason to tighten stops and take profits.  Trading volume increased.

On the 30 minute chart prices dropped sharply in the morning, dropped more until after lunch, and then recovered slightly.  Trading finished the last hour of trading with a hammer candlestick – which may add some momentum to tomorrows opening.  But remember, even if it does, one day does not make a trend.  We’ll need to watch for strength to return to at least the daily chart before considering new long positions.  And this assumes the weekly chart remains positive, and that doesn’t look good right now.

Trading Strategy:

Technical Analysis, Market Timing, and Top Stock Pick posts are free on this blog but are delayed a few days. 

For a $1 trial of timely market timing updates and top stock picks emails sent to you after the close of the stock market on each trading day please visit our subscription page.

View information on the model stock portfolio and how it grew by over 170% over the same time period that a buy-and-hold S&P 500 portfolio lost 14%.  No margin, options, penny stocks, commodities, or other high risk vehicles were used – just two well respected ETF stocks.

Get free, no obligation access to the real-time stock charts used in these posts.

View our free market timing signals ,  stock trading strategies , and stock trading forum at these links.

Technical Analysis, Market Timing, and Top Stock Pick posts are free on this blog but are delayed a few days. 

For a $1 trial of timely market timing updates and top stock picks emails sent to you after the close of the stock market on each trading day please visit our subscription page.

View information on the model stock portfolio and how it grew by over 170% over the same time period that a buy-and-hold S&P 500 portfolio lost 14%.  No margin, options, penny stocks, commodities, or other high risk vehicles were used – just two well respected ETF stocks.

Get free, no obligation access to the real-time stock charts used in these posts.

View our free market timing signals ,  stock trading strategies , and stock trading forum at these links.

Swing Trading Concepts Combined with Technical Analysis and Market Timing.

What exactly is swing trading?

Swing trading is a term that describes a type of short term trading strategy that takes advantage of short term moves in stock prices that are a component of a longer term trend.  Swing trading focuses on trade cycles anywhere from a couple of days to a couple of weeks, depending on the characteristics of the stocks price movement.

There are essentially two main types of traders in today’s stock market (besides the professional floor traders and specialists); day traders and institutional traders.

Day traders are extremely short term oriented.  Day trading usually consists of watching for an opportunity to capitalize on extremely short term movements of a stock during market hours.  Many traders are looking for a predictable movement of 5 or 10 cents, sometimes more, sometimes less.  Day traders typically never want to hold a stock or any position overnight.  Trading at the opening bell is just too unpredictable and volatile for them.  A day profitable day trade held from the prior day can easily gap against them at the opening of the following day either wiping out any profits or creating a devastating loss that takes a lot of winners to recover from.

Institutional traders at the opposite extreme have a different problem.  These types of traders are the big elephants of Wall Street.  The amount of money some of these institutions have to manage frequently moves the market for the stock they are buying and selling if transactions are not performed properly. 

Institutions employ large brokerage houses to move funds into and out of stock positions over a time period that can take weeks.  The brokerage house then tasks the floor trader to move the funds without affecting the market price too much.  The floor trader tests the market, buying some shares, selling them back, buying some more, selling them back, until the institutions funds are fully invested.  When an institution wants to get out of a position the situation is reversed.

Luckily for us, these transactions typically show up in a proper technical analysis so we can jump on a trend using swing trading concepts when it is appropriate.

So swing trading, with its average duration of a few days to a few weeks fits right between the day traders and the large institutional trading. 

What does this mean to us as practitioners of the swing trading strategy?

It means that the individual astute swing trader is essentially devoid of any real competition for their trades.  Neither the day traders or the institutions are not interested in the swing trader timeframe.  Our only real competition are ill-informed retail traders.

And that spells opportunity for you.