Swing Trade Approach:

Closed out the last half of my Beyond Meat (BYND) trade $119.95 for a +37% profit. Stopped out of my Amazon (AMZN) position for a +2% profit. It’ll be interesting to see how much the Target Sales slash trickles into the rest of retail today. I’m not being overly aggressive to the long side right now and I am still raising those stop-losses anywhere it makes sense to do so. I added one new short position to the portfolio as well. 

Indicators

• Volatility Index (VIX) – Volatility remains contained and as long as the Fed continues to engage in repo operations, I expect VIX to remain low. Rose 0.6% yesterday to 12.39. Hovering just above recent lows. 
• T2108 (% of stocks trading above their 40-day moving average): A 1% rise yesterday to 63%. Still within the consolidation range of the last three months and still lagging overall price action from the indices. 
• Moving averages (SPX): Trading above all the major moving averages. 
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Sectors to Watch Today

Weakness in the Financials yesterday, and likely again today due to GS earnings miss, creates the strong potential for a possible break below the month long consolation at its highs. I’m interested to see if the dip buyers will come in and stabilize this sector from breaking down today. Staples showing signs of bouncing following a late December pullback. Holding the 20-day moving average, and likely to push back to the all-time highs again. 

My Market Sentiment

Some loss of conviction here at the all-time highs, to really extend the prices substantially higher. Not unexpected, and doesn’t necessarily mean the rally is over, but it may be we don’t see any major moves higher for the time being. Right now, it is important, as earnings season kicks off, for there not to be a string of earnings misses that could send investors back to the sidelines.