Although this selloff was painful for many portfolios it can be a useful tool in many ways. One of the most important, in my book, is separating the proverbial chaffe from the wheat - identifying which stocks have been run up by speculators (many of the solar stocks, dry bulk shippers et al) versus those with 'strong hands'.

I'd argue that more money could in theory be made playing with those stocks that have been hit the hardest... once risk is adopted again and speculators flood back into the market. But in this type of market that does not appear to be on the near horizon. Wouldn't it feel more comfortable to have the more stable stocks in your portfolio right now? Those that held up best in this market correction and held key technical support levels? It would be for me, and this sell off was a great opportunity to see who has the best relative strength - this is where technicals come in for me. When I see a stock holding at its 50 day moving average in the ferocious selling of last week thru Monday I see a stock that has strong hands, and institutions supporting it. Those are names I want to be in, so I am compiling a list of these names, most of which I will list below. Now that is not to say these stocks are impervious to sell offs or when true panics happen they will not succumb. But now we have in just a 48 hour period seen a "throw in the towel" near term bottom followed by a major oversold relief rally. So we can see which potential candidates for a portfolio both held up the best, and rallied the hardest. Those are companies we want to put our money with in the quarter to come if you want to balance risk/reward.

I've broken down the stocks below that held their 50 day moving average in the selloff (at most they closed just below that average at the height of the selling either Friday or Monday, but for not more than 1 day) and then rebounded. I've highlighted in bold those that were so strong they were not even sold off down to their 50 day (in general these stocks only sold off to their 20 day average or a bit lower) - these would be in the strongest of hands....

All names below are either in the portfolio or stocks I have strongly considered or monitor on watch lists for consideration to add to the portfolio. I am am still working through my watch lists for additional names, but these are the lion's share. (by sector) These are the names I will be overweighting (or already am overweight) as we move forward for the next quarter.