How to Avoid a Big Gap Down? (Part-II)

Part-I:  http://perfectew.blogspot.com/2012/07/how-to-avoid-big-gap-down.html

I am going to have a revision on my stock watch list.  Why?  My current 1X ETFs are:
1. Some of them way too sluggish (e.g., XLU, VNQ)
2. Some of them very similar (e.g., QQQ vs. XLK)

I want something with good liquidity and also good volatility (but not too volatile).  In order to avoid a big gap down, the trading timeframe will be in long term instead of short term.

I am suffering from being wandering around to find what stocks to trade.  I never had this kind of problem on futures/FX trading.  I should (must) narrow down the stock watch list!  I got to do that ASAP!

I'll trade only one or two strongest 3X ETFs (which are diversified already) instead of holding many ETFs.  In order to avoid the Wash Sale problem, we will need to have backup (replacement) stocks.

The following is my tentative watch list:
Bull:  ERX, FAS, NUGT, SPXL, TBT, TNA, TQQQ, UCO, UPRO, XME
Bear:  DUST, ERY, FAZ, SCO, SPXS, SPXU, SQQQ, TZA

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Note that this article has been updated on 08/10/2012.  Please see The Final List for the latest watch list:
http://perfectew.blogspot.com/2012/08/the-final-list.html