Strength and Weakness

For the second consecutive day the market has been under selling pressure but there were a few pockets of relative strength to take note of. One of the simplest places to look is Barcharts All-Time-High. Today there were 30 stocks on the list and of those are a few IPOs to keep on watch:

LOCK

SHOS

WAGE

YY

Another stock showing great relative strength against the market and more specifically it's peers is SCTY which closed positive on the day and near it's all time high while other solar plays cratered as evident by the corresponding ETF TAN dropping nearly 5% on the highest volume in a year.

SCTY

While there is strength there is also notable weakness. One of the better list I've found for shorting opportunities when markets turn is the IBD-50. I've yet to be able to use this list effectively from a long swing trade perspective, but during corrections I've found it one of the best places to look for short candidates. Since the first of the year there have been a total of 75 stocks that have comprised this list and sorting them by comparison the the NASDAQ shows that 33 of them have dropped 4% or greater over the past two days.

IBD-50

There are opportunities both long and short but the lack of breadth and a pullback from extreme readings makes being long the more difficult side to manage here. It's also early in the pullback and there will be dip buyers and rallies along the way so moving aggressively short early is not without its pitfalls either. Corrections develop over time and as such fit the market maxim that the market will do what it takes to cause the most pain amoungst the largest number of participants. A retest of the high bringing in new dip buyers and jostling early shorts followed by another sell off downwards would be just such a scenario.