Barely a sell-off yesterday, market cooling off now

When you can get a 3 point sell-off these days on the S&P 500, you might want to consider it a generational buying opportunity as stocks rarely do anything but go up these days. 

Consider the 43 point sell-off back on May 17th. Since then, the S&P 500 (SPX) spent 9 out of the next 12 trading sessions rallying higher. For a one day sell-off of 43 points, the market followed it up with an 84 point rally. Basically 2x the sell-off amount. 

This morning stocks are looking to give back some more, in addition to yesterday. So far it is becoming reminiscent of the two day pullback on Tuesday and Wednesday of last week. It shouldn’t worry the bulls just yet. Watch key levels like the 5-day moving average, move up some of your stop-losses, just in case the market decides to sell-off like it did on the 17th, so that you are coming away with the lion share of your profits. 

I don’t focus much on the Stochastics, but it worth noting at these very overbought levels (98%), and has pretty much been sitting on overbought levels since May 24th. That kind of reading has some difficulty in persisting and what has been seen over the past year is stock prices going into extended sideways pricing action, which could be the start of what we are seeing right now. 

Gold (GLD) continues to rise impressively, while oil (USO) continues to fall – dropping 5 straight days and 7 out of the last 8. If you are wanting to get in some GLD or TLT going forward, that might not be a bad hedge play against your existing long positions. But stay away from the oil stocks – they are ugly and somewhat unpredictable at this juncture. 

Also, I keep waiting for the banks to bounce, particularly the big ones like Bank of America (BAC), Goldman Sachs (GS), Citigroup (C) and JPM Morgan Chase (JPM). But nothing is happening – in fact everything just keeps getting worse. 

S&P 500 Chart

Current Stock Trading Portfolio Balance: 

• 6 Long Positions

Recent Stock Trade Notables:

• Western Digital (WDC): Long at $91.24, closed at $89.29 for a 2.1% loss. 
• Broadcom (AVGO): Long at $236.65, closed at $241.15 for a 2% profit.
• SPXU: Long at 16.60, closed at $16.98 for a 2.3% profit.
• JP Morgan Chase (JPM): Long at $87.84, closed at $85.98 for a 2.1% loss.
• Micron Technology (MU): Long at $29.00, closed at $28.04 for a 3.3% loss.
• Alibaba Group (BABA): Long at $116.25, closed at $124.09 for a 6.7% profit. 
• Southwest Airlines (LUV): Long at $58.35, closed at 57.23 for a 1.9% loss.  
• Broadcom (AVGO): Long at $223.63, closed at $228.65 for a 2.2% profit. 
• Workday (WDAY): Long at 86.00, closed at 90.32 for a 5% profit. 
• Univar (UNVR): Long at $30.96, closed at $32.20 for a 4% profit.
• Alibaba Group (BABA): Long at $111.91, closed at $115.48 for a 3.2% profit. 
• Redhat (RHT): Long at $85.21, closed at $87.21 foor a 2.4% profit. 
• Darling Ingredients (DAR): Long at $15.19, closed at $14.90 for a 1.9% loss. 
• Apple (AAPL): Long at $143.82, closed at $147.11 for a 2.3% profit.
• Teradyne (TER): Long at $31.16, closed at $33.03 for a 6.0% profit.
• UPRO: Long at $92.75, closed at $94.78 for a 2.2% profit. 

See my entire swing-trading past performance here.