Swing Trading Strategy:

I added two new long positions and topped it off with a “just in case” short position for the portfolio. I closed out Steris (STE) for a 1% loss – the stock has literally done nothing for me the past month or so that I have owned it. Earnings tomorrow, and no way I’m holding through that. Selling on Friday after hitting all-time highs the day before, I’m kind of thinking this is a a “sit-on-your-hands” trading day and let the market play itself out some – see where it wants to go. If the action is definitive, I’ll look to add something to the portfolio. 

Indicators

• Volatility Index (VIX) – Declining trend-line off of the July highs of last year has offered up some support so far for the VIX, as it managed to bounce 3% yesterday to 15.47. 
• T2108 (% of stocks trading above their 40-day moving average): A hard decline of 8.5% Friday, takes this indicator back to 48%, despite being only 1% off of the all-time highs, and signaling that this market strength of late is all about the strength of a handful of stocks and not the collective bunch. 
• Moving averages (SPX): Trading above all the major moving averages. 
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

This Telecom sector is one difficult area to get a handle on. Hard movements both higher and lower, but since September, it hasn’t actually gone anywhere. Same with Staples, except it hasn’t made a noteworthy move since December. Energy still refuses a bounce of any kind, as it is quickly trying to give up its mid-week gains of last week. 

My Market Sentiment