Swing Trading Strategy:

Where Panic sets in…

Hitting levels all throughout this week that seemed like a bounce was near, and the following a Presidential prime time address that the market puked all over, the futs are limiting down in pre-market action and stocks look to bathe in the blood of investors. Today has the potential to create mass panic for investors and traders alike. I have remained small in my own approach in the Trading Block, not trading anything yesterday and keeping cash at about 85%. 

At some point the market will bounce, and it is surprising to me we haven’t even seen a sustained bounce of any kind at this point, considering we are at levels that have only been seen in 1987 and 2008 and those may even be exceeded today. Nonetheless, price pays, and you have to respect what it does, and that is why I am able to remain relevant, solvent and profitable all these years later, because I don’t second guess price, I managed risk and let the profits take care of themselves. 

You can check out all of my trades that I have made in 2020 – where I have been solid in the green both months by clicking here. 

Indicators

• Volatility Index (VIX) – Outside of 2008, you can’t find a time where the VIX has managed to stay this elevated above 40 for this long. In fact, it should see a move well into the 60’s at the market open. 
• T2108 (% of stocks trading above their 40-day moving average) Closed at 2.97 and was low as 2.66 at one point today. I suspect, there may even be a move under 2% today. 
• Moving averages (SPX): Currently trading below all the major moving averages. 
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Energy was the weak link yesterday, and no doubt will be in the mix again today. Expect all sectors to take massive hits today if the market cannot recover. 

My Market Sentiment