My Swing Trading Strategy

I closed my only short position in Shake Shack (SHAK) yesterday for a +6.5% profit. Now I am 100% in cash, waiting to see whether the bulls can push price through resistance or whether it is going to fall apart again at the highs. 

Indicators

• Volatility Index (VIX) – End of day sell-off in the final hour of trading took the VIX from positive territory down 3% overall on the day. Bear flag on the daily forming, but I’m not sure I’d put a lot of confidence in it considering a push into the 12’s can lead to quick bounces. 
• T2108 (% of stocks trading above their 40-day moving average): A 3% increase goes back up to 61%. Still weak relative to recent rallies. 
• Moving averages (SPX): Broke below the 5-day but quickly recaptured the MA in the last hour. 
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Energy for three straight days has led this market higher, and it continues to be the least desirable sector to trade in right now with its waves of unpredictability. I’ve avoided it for much of 2019 and no plans to buy it now sitting in overbought territory. Technology still the drag on the overall market. Hardly participating in any of the rallies, and some times selling off, when others are rallying. Healthcare attempting to break the declining trend line off of the July highs. 

My Market Sentiment

The lack of volume in this market is making the trading to be quite difficult, as we are having these mini-meltups on an almost daily basis. The algos are predisposed to buy everything, and with a lack of sellers, and little headline risk hitting the market over the past month, the market instead just sits below all-time highs waiting for another shock event/rug pull.

• 100% Cash.

Recent Stock Trades – See My Past Performance Here.