Stock Market Today: History Says It is a Stock-Pickers Market

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By ETF Stocks 

The equity markets got rolling last week as rumors of stimuli ruled trading. Stocks posted one of their best weeks of 2012. The great run followed on the heels of the worst news-driven weeks of the year.

ETF Stocks looked back in history to find similar bouts of volatility. Unfortunately, the majority of the yo-yo weeks were found during the great depression era. If history suffers déjà vu, investors can expect more of the past two week experience, major swings of red and green.

June’s second full week of trading could see early gains as the world sighs relief rally following Spain’s $100 billion bailout commitment from the EU (where does all this money come from?).

We can see the NASDAQ rallying to its 50-day average of 2950. It’s also where some resistance can be found. So, there are two reasons the index can turnaround if it flirts with the key benchmark.

It is our view that investors should view a continued rally cautiously. ETF Stocks holds this view because volume dwindled as the stock market tacked on gains, days after day. Typically, an inverse relationship between volume and price is a combo with a short shelf life; one, the other, or both must give way.

Obviously, ETF Stocks hopes rising volume follows, make that forces stocks higher. However, fingers crossed investing strategies fare about as well two-legged car chasing dogs on the highway.

With the back-history of consecutive volatile weeks, resistance ahead, and a run of poor global economic news, we might suggest employing short-term trading strategies in the current environment.

We have our eye on a few tradable stocks. Each of the following NASDAQ companies triggered a few of ETF Stocks favorite technical buy signals.

  • YRC Worldwide Inc. (YRCW)
  • Apollo Group Inc. (APOL)
  • Fossil, Inc. (FOSL)
  • Monster Beverage Corporation (MNST)
  • Ross Stores Inc. (ROST)

While our computer models say the preceding stocks have short-term bullish characteristics, we always suggest using stops to minimize losses for those occasions when our signals are wrong.

If you’d rather diversify by owning an exchange-traded-fund, First Trust NASDAQ-100 Ex-Technology Sector Index (QQXT) owns four of the five stocks mentioned up top. The index consists of companies in the NASDAQ-100 Index not classified as Technology according to Industry Classification Benchmark. 



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , ETFs , Investing Ideas , Stocks

Referenced Stocks: APOL , FOSL , MNST , QQXT , ROST , YRCW

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