Swing Trading Strategy:

That was not a bounce, my friend…

Today had all the makings of a bounce – oh it looked ripe for the taking. Bears tried to push the market lower, but no, the bulls would prevail, and we were going to have a face rippin’, short squeezing kind of day that would see the market rip 10% higher.  

But nope.

It was not to be. Instead we had a sideways, slightly higher kind of day because all the gains were flushed down the toilet at day’s end. Yeah, the market was setting up for a run into the close, but sellers came in, full tilt, and gave us a nasty doji candle to finish the day out with. 

I took trades in Advanced Micro Devices (AMD) and Apple (AAPL) a try, and by the end I was out of them both with returns of +2.3% and -0.6%. My only two trades of the week, and guess what, I’m in the green for the week! Not a lot, but because I was disciplined  and picked and chose, and mainly just remained patient, I didn’t take the bait on the multiple intraday rallies that failed this week. If I’m barely up and the market is way down, I’ll be honest, I’m going to count that as a huge win. 

Tomorrow is Friday, and if we know anything about Fridays, we know it is an absolute train wreck to hold trades over the weekend of late. So unless they find the cure for the Coronavirus AND cancer as well, on top of sending a stimulus check of one million dollars to every american, then I will probably be in cash going into the weekend. 

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) – A 5% decline on the VIX yesterday. Not much, and we are essentially range bounce between the 70’s and 80’s. The VIX has yet to come down, and today marked a great opportunity for the market bulls to do that, and they failed. 
• T2108 (% of stocks trading above their 40-day moving average): Today was a small cap rally of a bunch of trash stocks, that were rallying due to the massive run oil took today. Also retail saw an explosion to the upside. In all though, actually fell 6% down to 2.55%. Apple (AAPL) finished lower on the day – I can tell you this, it’s no rally without AAPL.
• Moving averages (SPX): Currently trading below all the major moving averages. 
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Energy was the main source of today’s rally, hitting 8% in gains, while the next closest sector was Materials at 3.8%. Utilities couldn’t catch a bid all day, and while the market managed to finish higher, I have no faith it plans to do so tomorrow. I’m 100% cash. 

My Market Sentiment