How do you tell if a stock is tied to the overall market?

Discussion in 'Trading' started by pk3r1234, Feb 21, 2018.

  1. pk3r1234

    pk3r1234

    The majority of stocks are somehow tied to the market and even on high volume/volatility can churn around and follow the same moves that the overall market is making. Today being the fed minutes, you see 1000s of stocks shoot up and sell off after the news is released. What is the best way to pick these stocks out?
     
    murray t turtle likes this.
  2. Don't, pick out those individual stocks -- just trade the SPY or SPX, the broad collective market.

    Individual stocks are bitchy and weird, and will inevitably deal you some wildcard, joker cards at you.
    Leaving you with a few stab wounds and scars in your trading performance.

    You could be a whale, and you won't have to worry about flooding the pool in those two tickers.
     
    Last edited: Feb 22, 2018
    tomorton likes this.
  3. vanzandt

    vanzandt

    Look at a stock's beta.

    https://www.investopedia.com/terms/b/beta.asp

    A beta of 1 indicates that the security's price moves with the market. A beta of less than 1 means that the security is theoretically less volatile than the market. A beta of greater than 1 indicates that the security's price is theoretically more volatile than the market. For example, if a stock's beta is 1.2, it's theoretically 20% more volatile than the market. Conversely, if an ETF's beta is 0.65, it is theoretically 35% less volatile than the market.
     
  4. pk3r1234

    pk3r1234

    This is actually the goal, I'm trying to avoid these stocks. It's an attempt to find stocks that aren't manipulated by fake volume and fake price action.
     
  5. RRY16

    RRY16

    At a minimum Do the opposite of what Lugey advises.
     
    vanzandt, niko79542 and Clubber Lang like this.
  6. Sprout

    Sprout

    There is no such thing. If it prints, unlike news, it’s certainly real.
    If you are referring to the secondary move from the fed announcement, you witnessed a rapid change in the day’s sentiment and trending Dominance.

    No additional buying pressure entered the market to sustain the long trend of the day.
     
    tommcginnis and murray t turtle like this.
  7. lindq

    lindq

    It's called market risk, and every 'stock' in the 'stock' market is exposed to market risk.

    If that concerns you, then (1) Trade instruments that are not related to the US stock market, (2) Trade indexes, or (3) Understand how movement in the market may impact a stock, and integrate it into your trading. Then it can work for you, and not against you.
     
    tommcginnis likes this.
  8. pk3r1234

    pk3r1234

    It's far fetched but what I'm really trying to find is stocks that are being completely powered by Daytraders or new money on the day. Those prints that churn a stock in the direction of the overall market are computers, not active traders. An example could be a low float/low institutional ownership stock that runs up 50% on the day, usually they aren't manipulated by the overall market. A low institutional ownership is an indicator but sometimes large cap stocks also have unique individual big moves and can be actively traded. I'm wondering if i'm missing something
     
    Last edited: Feb 22, 2018
    murray t turtle likes this.
  9. Sprout

    Sprout

    Whether a trader uses automation or not, those algorithms are designed and programmed by humans specifically for the purpose of profit or utility.

    A simple screener like finviz would produce your daily list.

    Personally, I’d be more interested in stocks with low float and high institutional ownership for longs (among other criteria).
     
    tommcginnis likes this.
  10. %%
    Yes, seek + ye shall find. If 75% of stocks move with the market like SPY; then sometimes you could find some of the 25% that do not.:cool::cool:
     
    #10     Feb 22, 2018