One of the biggest mistakes I made when I first started trading is that I didn’t understand the concept of sectors moving together and being in sync with the market. I was just throwing money at any stock I heard on TV or I read about. The reality of this is, STOCK SECTORS MOVE TOGETHER. They follow economic cycles, world news and institutional interest. Let’s start off right and get in sync from day one even before we place a trade. Sectors and markets move together, Industrials follow industrials, chips follow chips, transports follow transports and so on and so on. So we need you to set up a watch list with some of best of breed stocks from each sector that we talked about earlier when evaluating stocks. This watch list is going to have many stocks on it, and each day through your trading platform we are going to know which direction the sectors are moving. We are going to place the IBD top 25 on this list because IBD is a great source of finding the best momentum plays in the market. Earlier we also talked about common themes that you might have heard on any CNBC show. It’s important to watch these shows, CNBC will help you stay in sync with the markets and will also point out possible new plays that you can cross reference with IBD. CNBC stocks go on the list too.
On this watch list there are a few “TICKERS” that I need you to include. These are market following symbols or sector ETFs that will make it easier for you to know what sectors are moving or what is not.
NDX NASDAQ 100 stock group
SP500 Group of 500 stocks that makes up the SP500
DOW 30 30 toP DOW stocks
IYT Transportation ETF
SMH Semi Conductor ETF “TECH”
DBC Commodity ETF
XLF Financial ETF
XRT Retail ETF
GL Gold
SLV Silver
OIH Oil ETF
XLE Energy ETF
These symbols go on the list first. After them put the IBD 25, any stocks you want to follow from CNBC and then any other stocks you want to follow.
IMPORTANT!
When you put the watch list together make sure the column right after the stock symbol is “ % CHANGE “ Sort your stocks from the “BEST” “HIGEST GAINER” to the “WORST” “BIGGEST LOSS”. Each day when you turn on your trading platform the days best performers will already be ranked for you. You will notice this because of the tracking stocks that I gave you above, the sectors will be grouped together and indicate which way the market is headed. Over time you will begin to notice that sectors in motion stay in motion for a period of time. You want to be in the sectors that are moving to the positive. If they are at the bottom of your list, guess what? They are not making you money and you need to be in something different.
IMPORTANT!
The next thing you need to monitor is the SP500 that we put on the watch list. You need to be following stocks that are tracking ABOVE the SP500.
| Sym | (%)Chg | Last | ($)Chg |
| JDSU | 9.47% | 27.52 | 2.38 |
| SLV | 4.53% | 34.93 | 1.52 |
| NFLX | 4.15% | 211.8 | 8.43 |
| RVBD | 3.68% | 44.5 | 1.58 |
| LULU | 2.09% | 77.24 | 1.58 |
| PCX | 1.43% | 25.6 | 0.36 |
| OPEN | 0.86% | 89.88 | 0.77 |
| JNPR | 0.80% | 44.11 | 0.35 |
| MU | 0.78% | 11.66 | 0.09 |
| DBC | 0.56% | 30.45 | 0.17 |
| DECK | 0.53% | 86.7 | 0.46 |
| AAPL | 0.13% | 360.01 | 0.45 |
| BIDU | 0.00% | 121.85 | 0 |
| DE | -0.10% | 92.54 | -0.09 |
| IPI | -0.16% | 38.46 | -0.06 |
| UNP | -0.19% | 95.36 | -0.18 |
| $NDX | -0.50% | 2,359.96 | -11.8 |
| NVDA | -0.53% | 20.76 | -0.11 |
| SIRI | -0.55% | 1.81 | -0.01 |
| ARMH | -0.58% | 29.22 | -0.17 |
| CRM | -0.59% | 129.3 | -0.77 |
| SMH | -0.63% | 36.46 | -0.23 |
| AVGO | -0.64% | 32.79 | -0.21 |
| CRUS | -0.68% | 24.81 | -0.17 |
| $SPX | -0.74% | 1,321.15 | -9.82 |
| SWN | -0.95% | 37.61 | -0.36 |
| BAC | -0.98% | 14.13 | -0.14 |
| CAT | -1.22% | 102.98 | -1.27 |
| JPM | -1.30% | 45.48 | -0.6 |
| IYT | -1.33% | 91.48 | -1.23 |
| FCX | -1.35% | 51.69 | -0.71 |
| CSX | -1.50% | 74.57 | -1.13 |
| POT | -1.57% | 61 | -0.97 |
| F | -2.10% | 14.45 | -0.31 |
| GS | -2.24% | 160.8 | -3.69 |
| MS | -3.10% | 28.4 | -0.91 |
| XRT | -0.47% | 49.11 | -0.23 |
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