My Swing Trading Strategy

I added one new trade to the portfolio yesterday, but in terms of adding more long exposure at this point, I may hold off, until I can see with a bit more certainty as to whether this market wants to challenge new all-time highs or not. For sure, I’ll be increasing my stop-loss on my existing positions to protect profits. 

Indicators

• Volatility Index (VIX) – The VIX is getting crushed for a second day and well off of the +21 reading from just Tuesday. Down 6.1% yesterday to 16.27, it is testing its 50-day moving average which on the previous test, resulted in a huge bounce higher. 
• T2108 (% of stocks trading above their 40-day moving average): Another 20% move for the T2108, that pushes it up to 50%. That’s a huge day for the indicator, and breaks it out of the consolidation it had been stuck in for all of August. 
• Moving averages (SPX): SPX finally broke above the 50-day moving average and is now currently trading above all major moving averages. 
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Technology was the big winner yesterday, along with Discretionary, each moving up 2%. Industrials also had a big hand in the rally as well, and that is the three sectors you want to see rallying on a day like what was seen yesterday. As expected, Utilities, Staples and Real Estate all finished in the red. Money is flowing out of the safe sectors and more into growth once again. 

My Market Sentiment

The box pattern that we all became enamored with over the past month is finally broken. An absolute hell would be for price to falter and trade back inside of it again. However, there is some old trend-line resistance that rejected price yesterday and could be a problem going forward, in terms of hampering any kind of substantial growth in price action. 

Current Stock Trading Portfolio Balance

• 4 Long Positions

Recent Stock Trades – See My Past Performance Here.