Continued uncertainties over the fate of financial stocks helped keep sellers on the offensive on Monday as oversold conditions became even more oversold.

If oversold conditions are ideal for traders using “buy weakness / sell strength” trading strategies, then current conditions should be ideal for buying stocks, right?

Our Short Term PowerRatings have been tested in a variety of markets: from the raging bull markets of the 90s through the bear market from 2000-2003 and into the low volatility bull market that lasted until 2007. So while current market conditions might seem more than a little daunting, from a backtesting perspective, they are conditions that our Short Term PowerRatings â€" especially our highest Short Term PowerRatings stocks â€" are more than familiar with.

If you are looking for additional assurance that the coast is clear â€" or at least that the edges you need to trade successfully in the short term are present â€" then consider this addition to your trading strategy: look to trade stocks to the long side when the market itself has an above average Short Term PowerRating.

This is an anecdotal point rather than a statistical one. But waiting for the markets themselves to become deeply oversold before going fishing for high Short Term PowerRating oversold stocks is one way to have the additional edge that short term traders can use to their benefit. This is especially so when taking trades to the long side seems more than a little hard to do.

Right now, the SPY, the ETF which tracks the S&P 500, has a Short Term PowerRating of 7. The Nasdaq 100 tracking ETF, the QQQQ, has a Short Term PowerRating of 6 and the Dow Diamonds or DIA, actually has a Short Term PowerRating of 8. This suggests that the likelihood of the markets themselves rallying in the near term is higher than it has been at any point since October 2008.

This doesn’t mean that stocks in general will move higher â€" taking any or all of the five stocks below with them. But it helps show where the edges are. And for short term traders, knowing where the edges are is the first â€" and arguably most important â€" part of the game.

Sunoco Logistics Partners LP ( SXL | Quote | Chart | News | PowerRating) Short Term PowerRatings 9. RSI(2): 1.96

Open Text Corporation ( OTEX | Quote | Chart | News | PowerRating) Short Term PowerRatings 9. RSI(2): 0.253

Lancaster Colony Corporation ( LANC | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 9.56

Geron Corporation ( GERN | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 3.24

Myriad Genetics ( MYGN | Quote | Chart | News | PowerRating) Short Term PowerRating 9. RSI(2): 0.686

All five stocks in today’s report have Short Term PowerRatings of 9. Our research indicates that stocks with Short Term PowerRatings of 9 have outperformed the average stock by a margin of more than 13 to 1 after five days. These stocks have earned our second highest rating and should be among those that any trader looking to buy weakness and sell strength keeps an eye on over the next few days.

Does your stock trading need a tune-up? Our highest Short Term PowerRatings stocks have outperformed the average stock by a margin of nearly 17 to 1 after five days.

Whether you have a trading strategy of your own that could use a boost or are looking for a way to tell the stocks that will move higher in the short term from the stocks that are more likely to disappoint, our Short Term PowerRatings are based on more than a decade of quantified, backtested simulated stock trades involving millions of stocks between 1995 and 2007. Click the link above or call us at 888-484-8220, extension 1, and start your free trial today.