The Fundamental Swing Trading Approach

The stock market operates in a binary manner—it either rises or falls. Recognizing this simplicity can be surprisingly challenging.

For short-term swing trading: When the NYMO (New York Stock Market Oscillator) trends upward, it signals a good time to purchase stocks at the next market opening. Conversely, when the NYMO trends downward, it's time to sell stocks at the next market opening.

For longer-term strategies: An upward movement in the NYSI (New York Stock Index) signals a buying opportunity, while a downward movement suggests it’s prudent to either go to cash or short sell at the next market opening.

Both the NYMO and NYSI are derived from the McClellan Oscillator and are, in my view, the most effective indicators of market psychology, capturing the oscillations between fear and greed, and thus guiding market direction.

It's that simple—most stocks tend to perform best when the market does.

6/08/2022 — Midday Update

I wanted to take a moment to share an update: Following the clear NYSI signal, FNGU and GME have each seen gains exceeding 40% in this swing trade—41% for FNGU and 46% for GME. FNGU, my preferred leveraged ETF, is a powerhouse tied to the FANG index, which includes major players like AAPL, MSFT, GOOGL, and FB.

GME, on the other hand, is driven by mania.

P.S. It's worth noting that profits can be realized at any moment or secured with strict or trailing stops, so be cautious of potential reversal days, especially with GME today.

6/07/2022 — Midday Note

The NYMO indicated a buy signal yesterday, setting the stage for today’s market opening.

What unfolded? The overnight futures traders caused the market to dip, presenting NYMO swing traders with a favorable opportunity to start the day. It felt almost like a strategy to take advantage of those trading overnight.

As of now, my favorite ETF, the FANG Index FNGU, has surged 6% for the day alongside a solid 34% gain on the NYSI signal from 5/24.

This discussion, however, revolves around reassurance.

Do these signals actually work?

Beyond FNGU, all ten leveraged ETFs I track are up since today’s market open, with LABU leading at 14.4%. Moreover, all 30 of the top S&P stocks on my radar are showing positive gains today.

And finally, 45 out of the stocks on my Nifty50StockList are in the green since the market opened.

That’s enough reassurance from the NYMO for now.

6/01/2022 — Day Opening

The NYMO generated a sell signal yesterday for today’s opening.

It’s always advantageous to have a gap up for selling swing trades. FNGU, which was up 30% at yesterday’s close, achieved a 33.7% gain at today’s open, translating to $3,377 for each $10,000 invested.

5/30/2022 — Day's End Review

Are the above signals effective?

I can confidently reassure anyone with doubts: they indeed are.

The NYMO declined today, prompting profit-taking for tomorrow's opening.

At today’s close, FNGU, my favored 3x-Leverage ETN which includes stocks from the FANG Index—AAPL, FB, NFLX, AMZN, NVDA, BIDU, BABA, MSFT, TWTR, TSLA, GOOGL—has appreciated by 30% over the three trading days since the NYMO issued its buy signal for the opening on 5/26.

To reiterate: a 30% gain in just three trading days.

Meanwhile, the NYSI continues to hold a nearly 30% gain in FNGU as well…

The NYMO suggests it’s time to secure some profits from this swing trade.

(Refer to the charts for current dollar amounts on each $10K traded.)

5/27/2022 — Midday Update

Here's an updated chart showing FNGU up 24% in four trading days following the NYSI buy signal. It’s a curious situation indeed!

(Refer to the charts for current dollar amounts on each $10K traded.)

5/26/2022 — Midday Note

Yesterday, the NYMO turned upward, providing a buy signal for today’s opening, coinciding with the NYSI, which is now in its third trading day.

Recently, I highlighted BABA and BIDU, the Chinese counterparts within the FANG index and the FNGU leveraged ETF.

So how is this swing trade progressing?