10 Things I Love About This Market

The major averages are in a tailspin these days, with a bull's-eye pointed directly at the March lows. The Nasdaq 100's poor performance during Friday's selloff tells us that big tech stocks won't offer safe haven in the upcoming event, even though they've been a relatively good trade for the last three months.

But this isn't a column about gloom and doom. Frankly, there are plenty of those discourses to go around, so instead I'm taking a different approach as the calendar passes from spring into summer. In fact, it's my intention to be downright positive today and list the 10 things I really like about this market.

OK, expect a little sarcasm to seep into this listing, but that's not my main objective. Rather, when it finally comes, the elusive upside will develop from small themes that are already weaving themselves in the dark strands of selling pressure that hit the tape in May. Finding these small rays of light now might give us a tradable edge in the future.

1. Banking Index: The index dropped another 6% last week and is getting close to the multiyear support level I noted in a column last week. That floor should start the bottoming process and eventually yield a historic buying opportunity. But don't rush the gun, because big turns after long downtrends take time to set up.

Dow Jones Industrial Average

Click here for larger image.

Source: eSignal

2. The Mighty Dow: The Dow Industrials have led the market to the downside in recent weeks. But ironically, the venerable index shows a more bullish long-term chart than the S&P 500 or Nasdaq averages. Note how the March reversal started at six-year breakout support. A bounce at that level in the next month or two may trigger a massive double bottom that finally ends the bear market.

3. Daytrading: Without question, the last two years have yielded the most profitable daytrading environment since the bubble burst in 2000. The key has been the Market Volatility Index's (VIX) rise over 20, which has widened daily trading ranges and triggered the type of intraday swings that translate into fast-fingered profits.

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At the time of publication, Farley had no positions in the stocks mentioned, although holdings can change at any time.

Farley is also the author of The Daily Swing Trade, a premium product that outlines his charts and analysis. Farley has also been featured in Barron's, SmartMoney, Tech Week, Active Trader, MoneyCentral, Technical Investor, Bridge Trader and Online Investor. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks.

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