One of the rules we have for trading stocks is to focus on buying stocks that are above the 200-day. Time after time, this has proven to be the best strategy to trade stocks. When stocks get under the 200-day, chaos often breaks loose. You only have to look at thousands of stocks in 2008 after they broke under the 200-day. Buying those stocks costs investors billions of dollars last year when investment advisors and fund managers kept buying those "cheap stocks" all the way down.

Over the past year there has been a smaller and smaller universe of stocks above the 200-day to trade. In fact, in early March the number got to under 60 stocks! This means if you are following the 200-day rule, you had very few long set-ups for the past year or so on the long side.

But like most everything else in the market, reversion to the mean kicks in and I'm happy to say that today there are over 500 stocks above their 200-day ma and the number has been rising consistently for the past 6 weeks. This means more stock set-ups and more trades on the long side which ultimately means more opportunity for profit. This is good news.

Reminder: I'm conducting a 45 minute presentation today at 4:30 pm on our Summer Swing Trading College which launches in a few weeks. If you are looking for high probability trading strategies for stocks, ETFs, options, and e-mini's, along with learning how to conduct your trading as a business, please call 1-888-484-8220 ext 1 and reserve your spot for today.

Larry Connors is CEO and Founder of TradingMarkets.com and Connors Research.