My Swing Trading Strategy

I made quick work of a day-trade in Square (SQ) yesterday for a +1.3% profit. Outside of that I sat on my hands, as the market is in very low reward/high risk territory when it is 1% below the all-time highs. Until we can push through that level, I’ll temper my expectations for further upside. 

Indicators

• Volatility Index (VIX) – VIX continues to have an absolute meltdown, dropping yet another 7.1% in yesterday’s session and sitting at a very low 13.54. Last time this level was tested we saw a notable decline in September. Trading lower five straight days, and now over sold, VIX is setting up for a bounce here. 
• T2108 (% of stocks trading above their 40-day moving average): Bearish divergence in T2108 vs price action on SPX and QQQ as it is nowhere near the readings seen back in September of +70%
• Moving averages (SPX): Price is currently trading above all the major moving averages. 
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Healthcare, the market’s worst sector led the way for the bulls on positive earnings reports from the sector. While pushing through some key overhead resistance, this sector still remains problematic here. Financials have improved some, but not overly inclined to play them here with the weakness in the 10 year yield still. Technology trying to improve by breaking declining resistance off of the July highs. 

My Market Sentiment

Some notable resistance overhead with declining resistance coming in from all-time highs established back in July. Huge if it can break through that level for the bulls, however, if it cannot, which is the more likely outcome, then it is more chop for the market going forward. 

Current Stock Trading Portfolio Balance

• 1 Short Position.

Recent Stock Trades – See My Past Performance Here.