Its not easy, but I am beating Nightmare teams most of the time.
There are still some issues, though... like if Sion goes and then DN goes, you can't cleanse Pain with GK. Then you die to Palp's passive damage... especially GMY, given how many turns he takes. CLS in the squad to Buff Immune Sion would really help here.
The good news, though, is that Palp can't stun you anymore, at least. Sion will clear all your buffs, sure, but he applies Pain, which triggers Tenacity Up on your Jedi.