My Swing Trading Strategy
Yesterday was a wild open, with the market completely reversing the gains from the day prior, I sold my two long positions for small losses, right at the open and avoid taking on additional losses, and took on a position in SPXU which allowed me to recover those losses. The pre-market today is completely bonkers and absolutely no way to make any sense of it, as it is being thrown all around by the headlines. Good chance that today finds me sitting on my hands, and not adding any new positions, and simply managing the one position that I do have.
Indicators
- Volatility Index (VIX) – $VIX had a really solid day, up 26% to 22.1. It sets up well to test last week’s highs and possibly break through it, if the market continues to falter.
- T2108 (% of stocks trading above their 40-day moving average): A really bad day for this indicator as it dropped 29% down to 26% overall. Sets up well for a test of the August or even May lows.
- Moving averages (SPX): Back below the 5 and 10-day moving averages. Setting up well for a test of the 200-day moving average at 2795. Worth noting that the Dow Jones Industrial Average broke its 200-day moving average yesterday.
- RELATED: Patterns to Profits: Training Course
Sectors to Watch Today
Every sector was down in a major way yesterday, with Energy leading to the downside of 3.6%, but with Discretionary, Technology, Financials and Industrials all sporting moves in excess of 3% to the downside. As expected Utilities, Real Estate and Staples were the safe havens, relatively speaking, but still down over 1% each. Financials confirmed a double top, while Technology broke its rising trend-line off of the December lows. Staples has a very well formed head and shoulders pattern on the daily chart that is close to confirming. 
My Market Sentiment
The pre-market is about as crazy as you’ll ever see. Huge swings in both directions. The market is marginally higher this morning, but nothing convincing that says it can hold on to these gains. I expect more downside out of this market, but anything can happen in this market that is completely algo driven. The bears managed to close yesterday at the lows on SPX, and price is attempting to push its way out of recent consolidation below the 50-day moving average. All of which leads me to believe that this market has a lot more downside to it.
S&P 500 Technical Analysis
Current Stock Trading Portfolio Balance
- 1 Short Position.
