Scanning for Set Ups ... continued

In the last couple posts I have shared some of the setup scans that I run nightly looking for fresh ideas of stocks to trade. One thing that I always keep in mind is what the general market trends are therefore where I wish to concentrate my time as I look for trading ideas. In other words, do I look for bearish setups or bullish setups. Are we transitioning from one to the other?

In the current environment I would argue that we are likely transitioning from bullish to bearish on an intermediate term trend basis. If that is indeed true (and that is my current thesis), then I should look for stocks that are likely doing the same thing. Here's a scan I use for just that purpose. Its target is to uncover stocks that have previously been bullish but now are potentially changing to bearish. The criteria is

• Exchanges: NYSE AMEX NASDAQ(NM)
• Average Volume is at least 50,000 shares
• Last Price crossed below 50-Day MA
• Last Price is below 20-Day MA
• Last Price is below 200-Day MA
• Virtual Volume is at least 50% greater than Average Volume
• Last Price is at least $2

I have another one that is essentially the same but it looks for stocks that are above the 200-Day MA but have just crossed under the 50-Day MA. The stocks in that scan are generally more positive but they have further to fall if in fact they are turning bearish so I always take a look to see.