My Swing Trading Approach
Yesterday’s price action was uncertainly bearish and damaged the charts for the bulls some, but with the pre-market strength today, I wouldn’t count out a similar move that was seen on 5/30 – where it renders the previous day a bear trap.
Indicators
- VIX – Huge pop yesterday that broke the 5 month declining trend-line by a smidge.
- T2108 (% of stocks trading below their 40-day moving average): An 8% decline yesterday down to 60%. More weakness in this indicator than what the overall market is showing, suggesting the same is true for stocks as a whole.
- Moving averages (SPX): Broke below the 20-day moving average yesterday.
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Sectors to Watch Today
Real Estate continues to be one of the market’s best sectors of late – impervious to any sudden sell-offs like we have seen this week. Utilities continues with their dead cat bounce, but I don’t have much faith in it sustaining. Double top pattern in Materials unfolding – stay away. Also – don’t play the hero and try to get something out of Energy – huge topping pattern unfolding there.
My Market Sentiment
The market is cracking some, but well off of previous overbought conditions, and the Dow is actually oversold after selling off eight straight sessions. I expect that there will be at least an attempt at a bounce of some kind today.
S&P 500 Technical Analysis
Current Stock Trading Portfolio Balance
- 4 Long Positions
