My Swing Trading Approach

I am 100% cash right now. I am willing to play the bounce, but will likely only add a couple of positions in the early going. Watch for a possible market fade of the early gains ahead of the weekend, just as we saw last week. 

Indicators

  • VIX – Divergence in the VIX, as SPX hit new lows, but VIX failed to eclipse the Monday closing highs. Closed 21% higher at 33.5. 
  • T2108 (% of stocks trading below their 40-day moving average): Dropped 48% to 12.5%. These lows haven’t been seen since Jan/Feb of 2016. 
  • Moving averages (SPX): 10/20 day crossover to the downside. The 200-day moving average likely to be tested. 
  • RELATED: Patterns to Profits: An Intro Trading Course

Industries to Watch Today

Each sector is essentially in a free-fall here. Utilities went down the least, while Technology, Financials and Industrials led the way to the downside. 
patterns to profits email

My Market Sentiment

The indices remain in a free fall. Only the Dow hasn’t taken out the intraday lows from Tuesday. Nonetheless, they all appear likely to test the 200-day moving average at this point. At some point in the near future, be ready though for the prospects of a hard market bounce. It will be one of the biggest one-day rallies you’ll ever see. 

S&P 500 Technical Analysis

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Current Stock Trading Portfolio Balance

  • 100% Cash

Recent Stock Trades – See My Past Performance Here. 

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