My Swing Trading Strategy
If this market has you tired and annoyed over the past week, you are not alone. The low volume, whimsical trading patterns, certainly makes for some unpredictable markets providing poor breadth and lack of consistency on a day-to-day basis. With four positions open, plan to stay put today, unless we get a massive rally out of nowhere.
Indicators
- Volatility Index (VIX) – A respectable pop of 8.4% yesterday taking the indicator back up to 14.28. Over the past couple of months there have been multiple moves to the 17-18 range, following a move like yesterday’s. Let’s see if that unfolds in the days that follow.
- T2108 (% of stocks trading above their 40-day moving average): Hard sell-off that reignites the bearish divergence story line, as SPX hovers at the rally highs, stocks have been losing momentum under the surface. Current reading following yesterday’s 12% decline sits at 58%.
- Moving averages (SPX): Broke below the 5-day moving average for the first time in nine trading sessions. Could see a test of the 10-day or 20-day moving averages.
- RELATED: Patterns to Profits: Training Course
Sectors to Watch Today
Utilities, to me, looks like it is sporting a bull flag here, but could just as easily create a topping pattern should it drop another 1%. Staples still has a lot of momentum in its corner, while Technology did a great job of not being too impacted by yesterday’s sell-off. Energy lost a chunk of the gains from the previous three trading sessions while Healthcare and Real Estate showing more weakness than the rest of the sectors the last two days.
My Market Sentiment
The lower channel band in the chart below could be in play over the next few days or weeks, and would result in a pretty solid pullback if that were to occur. However, there hasn’t been enough volume of late to really drive prices down further. The price movement intraday remains erratic at best.
S&P 500 Technical Analysis
Current Stock Trading Portfolio Balance
- 40% Long.
