Pullback running out of gas? - Alert HQ signals for Thursday, Nov 3, 2009

This post is announcing that Thursday's Swing Signals, Trend Leaders, Trend Busters and Gap Signals are now available at Alert HQ. All are based on daily data.

Today we have the following:

• 323 Swing Signals -- 321 BUY signals and 1 SELL Signal plus 1 Strong BUY.
  
• 62 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 29 stocks that are new additions to the list and 25 that fell off the previous list.
  
• 62 Trend Busters of which 27 are BUY signals and 35 are SELL signals.
• 222 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed.
  

The view from Alert HQ --

Charts of major averages still look pretty awful but I think we're seeing this pullback run out of gas.

Why? Once again I'm putting my faith in the Swing Trading Signals. Over 300 stocks and ETFs bouncing off their lower Bollinger Band, coming out of an over-sold state according to Wiliiams %R and showing gains today. Breadth was good in terms of sectors - it seemed that almost all sectors were represented among this set of BUY signals.

Another indication that risk is becoming acceptable again is that small caps were in favor today. Not only did the Russell 2000 ouperform the other major averages today but there were a number of small cap ETFs on the Swing Signals list as well as plenty of individual small cap stocks.

Are our other signals providing confirmation? Yes and no. The Trend Leaders list is getting down to about as low as it can get. That implies it might be ready to go up, right? The Trend Busters list has a lot of foreign stock ETFs listed among the SELL signals. It shows the global nature of this pullback. Does it also show that the selling of U.S. stocks has begun to dry up?

So maybe I'm stretching to arrive at my opinion that stocks are ready to rise soon. But these are the times when you want to have a few stocks or ETFs picked out that you would be happy to own, especially if you can get them at the current lower prices. It's true that we could use another day or two of gains to confirm the turnaround but it sure seems like stock prices have stopped falling for the time being.

Using our signals --

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas.