Swing Trading Strategy:

When being in cash actually feels like a position…

Before you do anything else – watch my video on the stock market and its outlook that I posted this weekend!

That’s because it is! Cash is always a position, and right now, if you’re not short heading into the market open, which would have been a pretty brave thing to do following the face ripping rally on Friday afternoon, cash is the best place to be. My heart honestly breaks seeing this unfold. I know it brings a lot of pain and misery for a lot of people, and I can’t celebrate this one bit. Lives are being wrecked over this virus and the stock market’s reaction to it. 

For me, I couldn’t feel more thrilled about being 100% cash today at the open. I did not participate in the rally on Friday, and stayed on the sidelines. I’m better for it too. The market is bigger than any one trader, and to think that you can control this monster, especially when it is in a tailspin, is amateur thinking. These conditions, these times, requires immense respect towards the price action. Taking on ultra ETFs in this market is a recipe for disaster and not one I would ever consider myself, as the market on its own is already an inverse. 

DO NOT TRY TO BE A HERO ON THIS TAPE.  People are trying and they are failing. Let this market do its thing – let the dust settle. These are historic days in the stock market.

Stories will be told around campfires about these days. Let your capital and portfolio live to tell about them. 

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) – VIX is looking at an open probably around 30% or so higher. It should be right back into the 70’s following the huge sell-off on Friday of 23% after new rally highs of 77.57. The fact that it has sustained these levels for so long is utterly amazing. 
• T2108 (% of stocks trading above their 40-day moving average) A 78% rally that only improved matters to 3%, however, there is the potential to see this one go down to 2008 lows today. 
• Moving averages (SPX): Currently trading below all the major moving averages. 
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Financials led the way on Friday, but likely to take the brunt of this sell-off today with the rate cut. For that matter, expect every single sector just to get walloped today – nothing should be safe from this storm today. 

My Market Sentiment