Happy New Year everyone. The stock market is still in good shape according to the market health indicators. Therefore, I am taking valid long trades as I see them.

Here are the data points that matter currently, signaling the market is still healthy.

• Nearly 84.35% of NYSE stocks are above their 50-day moving average (top indicator). That means lots of stocks in are uptrends — favorable for swing trading on the long side.
• The blue bars show the daily rate of change in % (second from bottom). Price declines contain large single-day drops. Up periods are typically marked by much smaller daily movements, especially to the downside. We haven’t had any large drops of 2% or more (in a single day) since late October. When that indicator is quiet, it is a good sign.
• The NYSE Advance-Decline Line at a high (bottom indicator) along with the S&P 500. This shows wide participation in the number of stocks advancing.

Additionally:

• All the major indexes are performing well currently (not selective). This is good. IWM, the small-cap stocks index (purple), was a bit weaker than the other indexes over the last several days, yet the overall trajectory is up.
• From a price action perspective, we are in an uptrend over the longer-term and shorter-term. The S&P 500 is attempting to break higher after moving sideways in December.

These are not predictions or forecasts. I simply use these indicators to determine what conditions are right now so I can determine how much of my capital I wish to deploy while swing trading. Right now, I am taking trades as they come.

Swing Trading Stock Watchlists

Here are the stock swing trading watchlists for Contraction Continuation Patterns for the US and Canadian markets as of January 2. Some of these stocks are forming imminent trading opportunities, while others could develop over the next week. Since the market is in an uptrend and pushing to new highs, the Contraction pattern is the main pattern in play currently (relative to other patterns I trade).

I must emphasize that these are watchlists, not tradelists. Only a fraction of the stocks on a watchlist will meet the entry requirements and actually trigger an entry. Patterns that are setting up for an entry are compared to each other (and ideal trades) and assessed based on reward:risk, strength, and pattern integrity. This determines which stocks have orders placed in them.

US Swing Trading Watchlist

232 stocks met the scan criteria this week. That was reduced to this:

• NUAN – Contracting and consolidating. This is a steadier climber.
• DY – Contracting and consolidating.
• FLGT – Contracting.
• NIO – Contracting.

And some others:

• BALY – Contracting.
• TGH – Contracting.
• OESX – Contracting.
• HBM – Contracting.

Canadian Swing Trading Stock Watchlist

There were 107 stocks on the Canadian scanner list this week.

• TXP.CN – Contracting and consolidating.
• VSBY.CN – Contracting and consolidating (contracting for less than one month at the moment).
• SMT.TO – Contracting and consolidating.
• DEF.V – Contracting and consolidating.
• OLA.TO – Contracting. A consolidation here would be nice.
• PLTH.CN – Contracting.

And some others:

• CGG.TO – Contracting.
• EXRO.V – Contracting.
• EFL.TO – Contracting.
• ML.V – Contracting.
• HBM.TO – Contracting. Still small.
• AHC.TO – Contracting. Still small.