The number of stocks that are overbought according to our screens is truly staggering. While this means that stocks have a significant amount of bullish momentum behind them, it also means that many of these stocks will not be able to keep up. These are the stocks short term traders should be either avoiding or betting against.

Of the four stocks in today's report, three have Short Term PowerRatings of 3 and one has a Short Term PowerRating of 2. Our research into short term stock price behavior, research that involved millions of simulated stock trades between 1995 and 2007, showed us that stocks that we granted Short Term PowerRatings of 3 or less were among the worst performing stocks in that time period.

Specifically, we found that 3-rated stocks, after five days, had about 90% of the gain of the average stock. Stocks with Short Term PowerRatings of 2 fared worse, and stocks with Short Term PowerRatings of 1 were truly the stocks that traders should avoid—at least to the long side. 1-rated stocks, based on our research, actually underperformed the average stock by a margin of nearly 5 to 1.

Of the three different ratings, it is the stocks with Short Term PowerRatings of 1 that make for the best short selling candidates, followed by 2-rated stocks. Stocks with Short Term PowerRatings of 3, while likely to underperform, are not necessarily in so precarious a position that they make for the same quality of short candidate as stocks with Short Term PowerRatings of 1 and 2.

That said, 3-rated stocks are worth knowing about insofar as they often do not stay 3-rated stocks but, instead, often find their PowerRatings downgraded into that 2 or 1 range at which point they become much more attractive as potential stocks to bet against.

One characteristic about the four stocks in today's report is that all four are trading below their 200-day moving average. This is a critical aspect, as far as we are concerned, when it comes to when it comes to discriminating from among different potential stocks to bet against. We have found that when shorting stocks, shorting stocks that are below the 200-day moving average and have the same sort of low Short Term PowerRatings as the stocks in this report is a fundamental edge that traders should not deny themselves when looking to take advantage of weak stocks experiencing temporary strength.

All of today's stocks are very well know names. They are the kind of stocks that traders typically "want" to buy. And some day, any one of these stocks might be worthy of purchase. But based on their low Short Term PowerRatings, high 2-period Relative Strength Index values, and location below the 200-day moving average, that time is certainly not now. Again, not all of these stocks will make for top notch short sells just yet, but none of them are worthy being bought right now.

TD Ameritrade (AMTD | Quote | Chart | News | PowerRating). Short Term PowerRating 3. RSI(2) 93.69

E Trade Financial (ETFC | Quote | Chart | News | PowerRating). Short Term PowerRating 3. RSI(2): 92.73

Ford Motor Company (F | Quote | Chart | News | PowerRating). Short Term PowerRating 3. RSI(2): 96.39

General Motors Corporation (GM | Quote | Chart | News | PowerRating). Short Term PowerRating 2. RSI(2): 95.87

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