Swing Trade Approach:

Nearly three days of extremely dull price action. I don’t have high hopes for that changing tomorrow. Essentially what you have is a market that only pushes higher on the Fed’s “Not QE4”. China trade news, for now is out of the way, and the market is simply in a holding pattern. The Impeachment vote on Wednesday of President Trump should matter little to the market. Adding more positions to the portfolio can still play out well for you. For instance, in the Splash Zone today, Twitter broke out and primed to make a run into its gap. However, you have to assume that when you are getting long at these levels, that until there is a pullback of some kind, the risk reward is tilted against reward. 

Indicators

  • Volatility Index (VIX) – Managed to rally for second straight day, but lets be honest, it doesn’t mean squat here. Price has yet to move lower on the indices to validate any kind of upward move on the VIX. 
  • T2108 (% of stocks trading above their 40-day moving average): Actually trending for the first time, with another 3% move, to take it up to the highest reading since 9/30/19. Still a bearish divergence, but at least it is trying to break out of an almost 3 month range. 
  • Moving averages (SPX): Currently trading above all the major moving averages. 
  • RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Once again, seeing Energy in the top 3, but this time bracketed by Utilities and Real Estate. There seems to be a push towards some of your safer sectors over the past few days, while the hotter sectors like Industrials and Healthcare have taken a back seat. What we could be seeing is a transitioning from higher risk sectors to safe, defensive sectors. 

patterns to profits training course

My Market Sentiment

SPX snapped a five day winning streak with a 1 point sell-off that came in the closing minutes of the trading session (LOL!). Hardly anything to get worked up about, and not to take serious, until you see strong volume and a sustained sell-off without an intraday bounce. Until that happens, I wouldn’t get too concerned by this market. 

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