My Swing Trading Approach
Yesterday afternoon I added two new positions to my portfolio – both of which are gapping considerably higher – AMZN and GOOGL. I’ll be looking to add at least one additional trade to the portfolio to play the rally today, if it holds.
Indicators
- Volatility Index (VIX) – VIX Up another 2 points or 8.8% yesterday to 25. Almost hit 30 intraday. Its highest close since 2/12/18. I would look for it to fade from these levels in the coming days.
- T2108 (% of stocks trading above their 40-day moving average): Selling off another 33% yesterday taking the indicator to an absurd 11%. That is a close lower than what we saw in February, and creates a high probability opportunity for the bulls to rally stocks from.
- Moving averages (SPX): $SPX broke its 200-day moving average. Watch to see if it bounces back above it today, similar to the break and rally back in April. Currently trading below all of its major moving averages.
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Sectors to Watch Today
Technology is as oversold as you will ever see it. Down eight of the last nine trading sessions and almost 12%. Any market bounce will likely find Tech leading the way. Discretionary testing support levels from back in February/April. Rising channel in Telecom broke this week. Financials broke below its June low. This is the worst of all the sectors. Stay away. Energy may be ready to bounce here as well. 
My Market Sentiment
Yesterday’s sell-off had all the markings of exhaustion. At one point, the bulls bounced 52 points off the lows in less than an hour’s worth of trading on SPX, even though it gave up much of it before the close. That is a good sign that the bulls are looking to buy the weakness finally and push the market higher in the coming days.
S&P 500 Technical Analysis
Current Stock Trading Portfolio Balance
- 2 Long Positions.
