Swing Trading Strategy:

Are you living to trade another day? 

I’ve shorted plenty, and I mean plenty of bear markets. Most of the time successfully. Look at my track record for Q4 in 2018 and I did quite well with that, and so far I’m doing pretty well with this one too. I’m profitable so far in February, and expect to be at the end of tomorrow, I was profitable in January, and both months the market finished lower (assuming we don’t have the mother of all rallies tomorrow to finish green for the month). 

I’m not even looking at short setups right now – that’s totally foolish to be looking at short setups at this juncture – the risk reward is nuts. Now my focus has turned to the bounce plays. Not sure when it will happen, but it doesn’t hurt, when there is strong potential for one, to put a small amount of capital to work. I tried today, and quickly got out, when it was obvious this market wanted nothing to do with it. However, that doesn’t deter me from trying and at some point, there is going to be a snap-back rally as there always is, and the profit potential will be phenomenal. I have my doubts it will be tomorrow as people will be hesitant to get long ahead of a weekend with this corona virus, but on Monday, the first trading day of the month, I could totally see the market rallying then. 

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) – VIX closed at its highest level since August 24, 2015. Today it went up 42% and up over 129% this week alone! at some point there is going to be a crush in volatility, 
• T2108 (% of stocks trading above their 40-day moving average): A 50% drop in this indicator takes it all the way into the rare single digits where it settled at 9.35%. This is the area where you tend to see strong bounces at because the selling pressures become exasperated.  
• Moving averages (SPX): Sliced below the 200-day moving average like butter and now trading below all the major moving averages. 
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Real Estate, I kid you not was trading at all time highs at the end of last week. Now it is trading below all of its gains going back to September 3rd. You can’t make this stuff up. Energy is in complete free fall, and at levels that hasn’t been seen since early 2016. No sector has been spared, and they all look like a dumpster fire. 

My Market Sentiment