My Swing Trading Approach

The bulls have to show me that they can overcome yesterday’s bearish engulfing candle pattern. I won’t add further long exposure to the portfolio, unless price stabilizes right here, and I will be tightening my stops in a big way on my positions in order to secure profits. 

Indicators

• VIX – Biggest rally (17.6%), since the bounce began. Definitely keep a close eye on whether volatility follows through to the upside today for clues on overall market direction. 
• T2108 (% of stocks trading below their 40-day moving average): Nasty plunge of 21%, giving back all the gains of the last two days almost. Currently sitting at 31% and bearish as a whole. 
• Moving averages (SPX): 5-day crossed back above the 50-day MA, but 20-day crossed below the 10-day. Still a messy picture, but price still managed to hold all the major MA’s yesterday. 
• RELATED: Patterns to Profits: An Intro Trading Course

Industries to Watch Today

Every sector saw a complete rejection in price yesterday. Real Estate remains the weakest sector, and confirmed a bear flag pattern. Financials and Technology held up the best yesterday. 

My Market Sentiment

Yesterday’s sell-off, though on below-average volume, greatly concerned me, similar to the selling pressure I saw when the bulls had four straight days of being rejected at the 20-day moving average (last week). The bearish engulfing candle pattern over the last two days is a great concern for me, and I need to see price stabilize and hold yesterday’s lows, to remain bullish here. 

S&P 500 Technical Analysis

Current Stock Trading Portfolio Balance

• 5 Long positions

Recent Stock Trades – See My Past Performance Here.