Swing Trade Approach:

Good day for profit taking, taking half of my position off in UBER at $34.27 for a +13.7% profit, and Beyond Meat (BYND) at $94.57 for a 8% profit. In both cases, I’ll let the rest of the position ride out. I added one additional long position, and still have a number of short setups waiting in the wings if need be. Yesterday’s sell-off almost created a bearish engulfing candle pattern, and gave up the early gains to finish notably in the red. In total there was a 22 point sell off from highs to lows, and while I don’t mind buying the dip, I don’t want to simply trust this market strength coming into today, and would rather sit on my hands today and wait it out. 

Indicators

• Volatility Index (VIX) – A very small move out of the VIX, rising 0.2% to 12.56. Not going to be surprised this week, if I see a close below 12 at some point. 
• T2108 (% of stocks trading above their 40-day moving average): A 3.8% decline to 38% yesterday shows that the stocks under the surface still are not as strong as the overall market indices suggest they are. 
• Moving averages (SPX): Trading above all the major moving averages. 
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Sectors to Watch Today

Only two sectors traded higher on Friday and they were both defensive ones: Utilities and Real Estate. Energy continues to see a lot of weakness, but the pullback so far is quite orderly, and nothing I would be concerned with at this point. Discretionary is also consolidating at the all time highs, as is Financials. Healthcare and Technology are your two strongest sectors right now. 

My Market Sentiment

Following last Thursday’s breakout, saw price pullback to the short-term breakout level. I’m curious to see if there will be more fading of market strength, or whether that was a one time event, because typically when that starts the happen, you can find yourself on the verge of a bigger pullback.