Well, first off, it is important to realize that Market Momentum is now down. Globally.
In general, the better bet is for falling stocks. Taking the “Bear” side of trades.
But in general, the theme of Momentum Monday is to try to find those instruments (stocks, ETFs, whatever) that have upward momentum for a ‘long side’ trade. That’s not easy in a falling context. It is even harder when that “fall” has only been running for a week or two.
The way markets roll over is not uniform. It starts with the worst and weakest stocks first, then it slowly works up the quality chain taking down ever more “safe” stocks. In the limit case in a panic, even the best of the best are sold for cheap. The common trap is to have one stock roll over on you and then buy into one that is ‘still going up’ only to have it roll over. Repeat until 100% of stocks are falling and you have taken a down trip in several in a row, losing more than if you had just ridden one down. It is VERY important to guard against that “serial dropping” when market momentum rolls over.
So if we look at the USA market over a 3 month period, there is a lot of green (even with the recent roll down). But as we look at one month, then one week periods, much more red. The goal is to find something so strong it can fight that falling tide. Not easy. Generally I don’t bother. I step out of generally falling markets and just wait. Much safer. (On my ‘someday’ list of skills to develop is getting good at shorting during those times; but I have an irrational dislike of shorting based on it being “wrong” to borrow someone else’s stock and sell it out from under them….)
In general, just realize that going long when the market is falling is a Very Bad Idea and it is much better to pick your targets, but wait for the broad market bottom indication prior to making a ‘buy’.
At any rate, here are broad market captured images for the four time periods so you can see how the rollover creeps to ever more companies:
Got it? BAD idea to buy anything “long” at this time.
On this chart of ETFs that are “going up” you can see that it is “short funds” and Natural Gas UNG and not much else.
These charts are all 2 x the linear size, so clicking on one gets you something readable. Click on the links to Finfiz and the individual cells ‘zoom in’ and become active to give you data about individual tickers of interest.
One Month Rising
I’ve picked tickers that have been rising over the month. A few have been pitched out simply because they looked like a ‘pop and flat’ as some news hit. Others might have not looked stable or had a ‘penny stock’ price. With that said, I’ve not done any ‘vetting’ of these tickers. They all ought to have the news flow on them checked and the financials inspected prior to a ‘buy’ decision. Still, these ARE going up in a down market context.
Here’s a live chart from Bigcharts.com
And here is the next 10:
There are more “bubbles” below those that are still green, so one could make another 10 or 20 ‘picks’ if desired. But I suspect that this 30 or so is likely ‘enough’ for one posting…
So if you pick any of those tickers, be sure to make a chart with those in it and check it daily for a ‘failure to advance’ or starting to drop. It is important to ride a hot ticker while it rises, but get off when it turns against you (and the “shorts” borrow YOUR stock from your account and sell it in a ‘short sale’ out from under you… Yes, YOUR stock. That “hypothecate” in your account agreement means shorts can sell YOUR stock, drive the price down, then buy it back from you later when YOU finally give up and sell…)
Many of these charts do have a nice “look” to them, so I suspect you can find a 1/2 dozen decent tickers to try, even in a general down market; but remember that no ride is forever and “when the cops come they take the good girls out with the bad”, so never think your ticker can not drop on you. As soon as it changes from “higher highs” to “failure to advance”, step out. You can always step back in if it starts to behave again. DO watch out for earnings announcements. Often a hot stock will pause just before earnings, then shoot up. You don’t want to step out on THAT pause and miss the jump up! (Bigcharts has a ‘show earnings’ choice under the upper indicator selection that puts a E on the chart on earnings dates.)
Now, for anyone using this, if you DO do the homework and look up a ticker and find you like it, be sure to report back on what you found and why! Or if one is a ‘stinker’ on meth, let us all know that, too.
Doing the same “pick green bubbles of the 1 month chart” but with ETFs shows several “Ultra short” or leveraged short tickers. These are NOT for investing, just rapid trades. (over long periods of time the ‘value’ in them tends to evaporate as option ‘time value’ evaporates. Many of these use a portfolio of some bonds with some option contracts to make a synthetic leveraged version fo the basic ticker. It tracks well short term, but slowly evaporates longer term.) So be careful, OK?
Mostly short (or ultra short) stocks and some energy tickers. Long natural gas and even an “ultra” bond fund. I’d likely be more comfortable working down into the lower level of less leveraged ETF tickers from the link:
Mousing over each button and waiting gives a mini-chart of each ticker. Picking those that have recent rise gives some bond funds along with things like “short silver” and others.
Again, be cautious with anything “ultra” or leveraged. While these things eliminate corporate specific risks, there’s still a lot of risk and any ticker can turn on you just as soon as some rich whale decides to buy or sell.