My Swing Trading Strategy

No new positions added to the portfolio yesterday, though I did tighten the stops, and will look to do the same again today, while also possibly adding more 1-2 new trades as well. Again, when the market is uncertain, and not overly accommodating, doing less is more, so I am very careful, regardless if it is to the long or short side, of not over-trading the account. 

Indicators

• Volatility Index (VIX) – Huge pop in the VIX without giving up hardly any of the gains at the close. Instead it broke through its 20, 50 and 200-day moving averages and could see additional movement higher to 19 before it sees any resistance.
• T2108 (% of stocks trading above their 40-day moving average): Biggest decline that has been seen since August 27th. The entire move engulfed the previous eight trading sessions. 
• Moving averages (SPX) Broke the 20-day moving average, just barely, but didn’t really see any real attempt to bounce off of the MA. The 50-day MA is now in the sights of SPX. 
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Utilities was once again the go-to sector for stocks, and coupled with Staples, were the only two sector to finish the day in positive territory, with the former establishing new all-time highs, and the latter developing a well formed bull flag pattern. I thought that there may be an opportunity for a bounce in Energy considering it was forming its own bull flag, but that fell apart quickly and now all the gains made from the Oil facility in Saudi Arabia have been wiped out. Technology is a major concern here, as it is now broken below its 20 and 50-day moving averages in glorious fashion. Looks very much like it wants to test its August lows and perhaps even the June lows. 

My Market Sentiment

It is possible here that we are seeing a double top form in the market here, which if that is the case, would take price well below the August lows, and possibly even the June lows. However, that would mean that the “buy-the-dip” mentality of this market would fail along the way. Also more headline risk has been added to the market with the strong potential for President Trump being impeached, with 207 representatives now in favor of such an action. They only need 218. 

Current Stock Trading Portfolio Balance

• 2 Long Positions, 1 Short Position.

Recent Stock Trades – See My Past Performance Here.