Swing Trading Strategy:

Holy cow what a crazy, freakin’ day! Granted, a 100 point sell-off on SPX is nothing like a 100 point sell-off back in January of 2018 when it was trading 500 points lower. However the impact that it has on the portfolio is still incredible. Most of my long positions over the last two trading sessions where the SPX has dropped over 135 points, has been either stopped out or closed out by choice. 

I closed out one of my longest positions back on Friday, Restoration Holdings (RH) for a +9% profit, only to be thwarted by a +12% profit in Etsy (ETSY). Additional positions include: Home Depot (HD) for +8%, Square (SQ) for +9%, Ulta Beauty (ULTA) for +5%, +4% in Switch (SWCH), covered a portion of my United Parcel Services (UPS) for +5%, +6% in Tesla (TSLA), and in Caterpillar (CAT) for a +3% profit. 

So plenty of profits, but they were also some losses too, but but the winners won out in the end. The losses were manageable and small, except for Zuora (ZUO) which gapped a couple percent below my stop loss for a 7% loss. Others were small losses in Visa (V), Facebook (FB), Fastenal (FAST), and Uber Technologies (UBER). 

You can check out all of my trades that I have made in 2020 – where I have been solid in the green both months by clicking here. 

Indicators

  • Volatility Index (VIX) – Finished up 47% on the day. A wild day for the indicator, and not something you normally see. It was the highest reading since January 3rd of last year. The is a strong tendency for years now, for the VIX to see every spike higher quickly sold, and that could be the case again tomorrow. 
  • T2108 (% of stocks trading above their 40-day moving average): The lowest reading since October of last year. The reading on this indicator are not extreme until there is a breach below 20. 
  • Moving averages (SPX): Gapped and currently trading below the 20-day and 50-day moving averages. 
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Sectors to Watch Today

There wasn’t a single sector that was spared the wrath of today’s market sell-off. Utilities interest me quite a bit because it has found support at the January highs where it consolidated for a couple of weeks. Could certainly bounce higher from here. Triple top pattern confirmed on Staples. Double top in Inudstrials. Materials have almost pulled back to its rising trend-line off of the December lows. Financials broke below its January lows as did Discretionary. Most notable was Energy Breaking below its December lows, and it could get really ugly there. 
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My Market Sentiment

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