Swing Trade Approach:

Added two new long positions on breakouts yesterday while moving my stop-losses up on a number of existing trades. A number of my positions are also tracking the moving averages and any close below them, will lead me to closing out my positions. The stock market is looking at a 3-day weekend, and may lead to some profit taking at the end of day. No guarantee, but worth watching for. 

Indicators

• Volatility Index (VIX) – Tried to break into the 11’s yesterday, but ultimately bounced off the lows. Clear area of short-term support going back to the November lows. 
• T2108 (% of stocks trading above their 40-day moving average): Indicator is looking very good following a 9% rally. Currently sitting at 71% and the strongest reading since September. A push above 76% would be huge for the health of this market. 
• Moving averages (SPX): Trading above all the major moving averages. 
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Sectors to Watch Today

Industrials showing some amazing strength of late, hitting new all time highs day after day. Technology traded in lockstep doing the same again. Some room for a pullback, but let’s be honest, that has been the case for a couple of months now. Energy is slacking ever since the the treat with Iran was neutralized, and may see an even bigger pullback in the near term. Utilities by far the hottest sector at the moment, with capital quickly flowing into it for seven straight days. 

My Market Sentiment

SPX continues to march higher with very little concern for any downside risk. The big tech companies are worth a combined five trillion, and there has yet to be a hint of profit taking. Honestly, I don’t know how long this can go for. I’ve seen in the past a lot of traders get reamed for trying to short a crazy bull market, thinking it can’t last, yet it does. That’s not me saying it is different this time, because it isn’t. What is the same is that the market can act irrational far longer than you can remain solvent if you choose to short this market.