Due to the significant declines in the market over the last couple of weeks, our pool of reasonable stocks to daytrade from the long side has evaporated substantially. I had to expand my normal stock screens just to come up with a list of potential trades for Monday, otherwise, I was faced with no candidates based on my normal screens.
On the other hand, with the averages in such a steady downtrend, we need some sort of rally to present some better shorting opportunities as well.
This may suggest that we are due for some kind of a rally, so watch out for that. This rally will come as a result of sheer exhaustion on the part of the sellers, rather than from any demand for stocks. However, even if that is the case, there is the chance of a decent rally, as the oversold tensions get tighter and tighter.
The bottom line is you need to be very cautious with your trading in the coming days! This is not the time to swing for the fences!
Scott Cole
www.bestdaytradingstocks.com
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