Swing Trade Approach:

Took half my position off the table in McDonalds (MCD) for a quick 4.1% profit. I’m looking at this point for obvious reasons to close out a trade. As good as this rally has been, I don’t want to be a person who doesn’t take advantage of an amazing market rally and squander the profits it provides. In that same regard, I got into Restoration Hardware (RH) today, but jumped out of it for a small 1.3% loss, because the volume didn’t flow in like I was expecting and simply floundered all day long and gave me very little reason to hold over night. This is even more so, when you consider how volatile that stock can be.

I’m now very much focused at pushing up my stop-losses on existing positions to areas where it makes a lot of sense. 

Indicators

• Volatility Index (VIX) – So the volatility completely disappeared today, especially after Trump finished his address on the Iran matter. I suspect, barring a major international event, you’ll see VIX creep back down into the 12’s and may even 11’s before bouncing again. 
• T2108 (% of stocks trading above their 40-day moving average): End of day sell-off took out much of the gains this indicator had made, finishing only 1% higher at 61. 
• Moving averages (SPX): Recaptured the 5-day moving average and back above all the major moving averages again. 
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Technology is making new all time highs once again. Biotech is back trying to push Healtcare towards new all-time highs. Energy is pulling back for a second straight day, and saw a strong dip below its 10-day moving average, something that hasn’t happened since the lows in December. Discretionary and Industrials are the other two sectors to focus on, while Financials consolidate and are poised to make a new run to ATH’s. 

My Market Sentiment

I hate the feeling of a market that gets ‘too easy’, or ‘too good to be true’. It kind of feels like that at this point, and while the market can certainly keep climbing higher, especially in an election year, I won’t change how I manage the risk on my individual trades. SPX hasn’t really done much over the last couple of weeks, but still maintains key support levels, and overcomes geopolitical events with relative ease. At this moment, the Iran crisis seems to be handled well according to the market, and unless it flares up again, we could see that whole matter quickly fade into the sunset.