My Swing Trading Approach
I swung a trade to the short side yesterday, but quickly covered it in the afternoon, when the market started to pop higher. I’m not overly aggressive ahead of the midterms here simply because, it is hard to determine with any confidence what the ultimate outcome will be, particularly when it comes to turnout, and turnout is what drives results. So, I won’t rule out adding a new trade today, but it won’t be more than just one trade.
Monday’s Swing-Trade Ideas:
Take a look at three trading ideas to prep you for the trading session.
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Long Cisco Systems (CSCO)
Long Tractor Supply (TSCO)
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Short Adobe Systems (ADBE)
Indicators
- Volatility Index (VIX) – Small divergence with the VIX rallying 2.3% in the face of a market rally.
- T2108 (% of stocks trading above their 40-day moving average): Still a lot of bounce in this indicator as it has gone from the single digits back on 10/26, to 26%, rallying another 18% yesterday.
- Moving averages (SPX): Still testing the 20-day moving average the last two trading sessions, but yet to break through. The 200-day moving average is still in play here.
- RELATED: Patterns to Profits: Training Course
Sectors to Watch Today
Energy and stocks within the more defensive sectors, like Utilities, Real Estate and Staples represented the bulk of yesterday’s gains, which isn’t where you want your strength to be if you are expecting further upside in the market. Financials have rallied for a sixth straight day, while Technology continues to falter, but not necessarily looking to resume the downtrend just yet. 
My Market Sentiment
What happens today doesn’t matter much versus what happens tomorrow after the election. You see, there is very little certainty in any prediction on how the market will react ahead of tomorrow’s opening, following the mid-term elections. The bounce still has some legs to it, based on what SPX did yesterday, but some cracks emerging in tech that may suggest the best of the bounce is behind us.
S&P 500 Technical Analysis
Current Stock Trading Portfolio Balance
- 100% Cash.
