My Swing Trading Approach

I closed out AMZN for a +3.4% and GOOGL for a small profit. I would  have liked to of held them longer, but I had to make sure that if the market was going to tank midday like it did, that it didn’t take my profits with them. I added another long position later in the day, and have some profits I am working with there. I will look to add another long position to the portfolio today, but also be aware of the strong potential for a dead cat bounce. 

Indicators

• Volatility Index (VIX) – 14.7% decline on Friday, wiping out all of Thursday’s gains. Reversal pattern in play here to the downside. 
• T2108 (% of stocks trading above their 40-day moving average): Insanely low and went into the single digits – as low as 9.4%. Historically, single digits are a rare feat, and offer some of the greatest bounce opportunities for the indices. 
• Moving averages (SPX): Broke back above the 200-day moving average, but barely holding it. Follow through is key for today. 
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Technology was the biggest winner on the day, Friday. Huge bounce, and recovered about half the losses of the previous two trading sessions. All of the sectors rallied, but I would stay away from Utilities on further upside out of this market, and Industrials and Financials struggling was surprising, and barely participated. 

My Market Sentiment

Friday’s bounce was expected as conditions were extremely oversold, but the bounce didn’t exude confidence, and the breadth wasn’t that great. Follow through is extremely important today, to instill some confidence in the short-term sustainability of a bounce. 

S&P 500 Technical Analysis

Current Stock Trading Portfolio Balance

• 1 Long Position.

Recent Stock Trades – See My Past Performance Here.