My Swing Trading Approach
Days like we have seen over the last three trading sessions, is the reason why you must use stop-losses in this market and to protect profits, and to be strategic about their placement. I’m not in a rush to buy the dip here. I would rather the market establish firm footing and show that it is willing to look beyond the trade tensions without breaking down in the process. Once that happens, more long exposure can be had. For now, a shift towards potential short setups must be looked at.
Indicators
- VIX – Again a gap higher, followed by a decline the rest of the day. VIX continues to struggle to maintain any gains.
- T2108 (% of stocks trading below their 40-day moving average): Despite yesterday’s market decline, the T2108 saw a 2% bounce providing a notable bullish divergence for the market.
- Moving averages (SPX): 10-day moving average broke yesterday, but the 20-day moving average was successfully tested and held.
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Industries to Watch Today
Energy finally had a significant bounce yesterday, followed by the typical market leaders of Technology and Discretionary, which continues to be the two best sectors in the market to trade. Industrials holding the 20-day moving average and instituting higher-highs and higher-lows. Financials continues to test the 200-day moving average and hold.
My Market Sentiment
Another buy the dip opportunity yesterday, despite a very negative open. Today marks the third large gap down for the market, which is unusual, considering the previous two dips were bought. All of this is due to the escalating tensions between the US and China as it pertains to trades and tariffs. Watch the rising trend-line off of the May lows. Needs to hold it into the close.
S&P 500 Technical Analysis
Current Stock Trading Portfolio Balance
- 5 Long Positions
