--> S&P 500 Market Update and Stocks To Add To Buy Watchlist

S&P 500 Market Update and Stocks To Add To Buy Watchlist

Market Remains In Sell Mode :

The S&P 500 has been in distribution mode since breaking down below the rising 10-week moving average (MA) in early October and has yet to show any signs of bottoming. Bearish momentum is building on the weekly chart below with the 10-week MA crossing below the 40-week MA. Note that each rally attempt has stalled at the declining 10-week MA. Any bounce off the lows should be monitored for short entries in stocks that are breaking down below the 50-day MA on the daily chart.

$S&P 500 weekly

If you operate on the long side of the market only, then cash is king. The risk-reward ratios for longs are not favorable right and won’t improve until market volatility contracts and major indices stop trending lower. When risk-reward ratios are not favorable, the reward for going long isn’t worth the risk we take holding the position.

During any corrective phase in the market, there are usually a handful of stocks that show relative strength by basing out (above the 50-day MA or 10-week MA) or even trending higher ($CDXS below) while major stock market averages sell off.

Below are a few stocks that have held up really well during the current market selloff. When market conditions improve these stocks could be the first to move higher.

$TWLO weekly

$CDXS weekly

2 comments on “S&P 500 Market Update and Stocks To Add To Buy Watchlist

  1. Did you trade CDXS? If so, what in your rule based plan told you to enter? What was your entry trigger and what is your PT? Is this trade a swing trade? If so , how long do you plan to be in it?

    Thanks in advance



    1. Hey Stocktradingblogger,
      We did not buy CDXS but it’s on a watchlist.

      Thanks for stopping by and checking out the blog!

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