My Swing Trading Strategy

I kept all of my current positions that I came into the day with and added one additional trade in the retail sector. I’m not looking at adding any additional trades at this point, and will rest on my current trades, until this market can show that it is ready to rally higher. No need at this point, to add additional long exposure. 

Indicators

• Volatility Index (VIX) – There was a 6.8% pop that took the indicator back up to 14.67 and snapped a four losing streak. I still expect that we will see the 11-12 range before experiencing any sustained sell-off. 
• T2108 (% of stocks trading above their 40-day moving average): A mixed reaction on the market Friday, kept the indicator lower for a second straight day, but barely so, as it still remains at around 68%. 
• Moving averages (SPX) Price gapped below and closed just below the 5-day moving average. Could see a test of the 10-day MA today. 
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Energy rocked it yesterday. With the bombing of the oil facilities in Saudi Arabia, this sector jumped 4.1%. Expect it to continue to surge higher, the longer it takes Saudi Arabia to get production back to 100%. Also headline risk for surging oil prices exists if the United States and/or Saudi Arabia goes to war against Iran. A lot of headline risk exists in this sector now, because you’ll see a significant gap lower if production comes back on line quicker than expected or if tensions ease. Materials was dragged higher as a result of Middle East tensions, but outside of that, Discretionary started to pull back for the first time in eight trading sessions, and Technology showing signs of a bull flag. Healthcare still trading inside of a multi-month trading range, but close to breaking out.  For a complete sector analysis, check out my latest post. 

My Market Sentiment

SPX is bull flagging at this point. No concerning selling issues in the two day losing streak and more of a consolidation of the recent rally than it is anything else. With that said, much of the rally has come in the junk stocks and small caps. Large caps and technology stocks in particular will need to step it up in the coming days to keep pushing price beyond the all-time highs. 

Current Stock Trading Portfolio Balance

• 4 Long Positions

Recent Stock Trades – See My Past Performance Here.