This story was originally published here.
During the run up to Labor Day, I'm going to give you some tips on making your trading labors much easier.
Today's conversation picks up where the one from June 27th left off.
Back then, in a column called Here's Your New Favorite Trading Tool (Part 1) I wrote…
“Checklists make everything easier to do well. “Here are some things that, if you attend to them, will make trading much easier.”
Our first three items were…
- Always start by looking at the wider market.
- Keep and maintain a stock watchlist.
- Be on the lookout for “crosses”.
Today, we'll add the next three more “to dos” to the list.
First, let's see how the market's been doing.
(Click any image to enlarge)
All five major averages posted gains. And for the second straight week, small-caps trailed on a relative strength basis.
The tech-heavy Nasdaq Composite again took top spot, gaining an impressive +3.39%. The S&P 500 added +3.26% while the Dow Jones — one week before undergoing a major shakeup — caked on +2.59%.
Our two small-cap proxies — the Russell 2000 (RUT) and the S&P 600 — rose +1.93% and +1.66%, respectively.
Before we get to the checklist, I'd like to clarify something from last week's Small-Cap Monday.
I had said that small-cap stocks were underperforming across all sizes and styles (small-cap growth… small-cap blend, etc.).
Then I offered five small-caps that were underperforming both the market and their sector peers. (Their sectors were also underperforming the market.)
Based on your comments, it's clear I gave the impression I was bearish on the market. I'm not.
This is our #1 indicator/risk barometer — the New York Stock Exchange Bullish Percent Index (NYSE BPI)…
Editor's Note: Click here to keep reading.
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