My Swing Trading Approach

With futures trading lower again, and with some of the profit-taking seen in technology, I am still looking at taking a cautious tone, coming into today. Adding another position to the portfolio will likely result in my closing out another, in order to avoid additional long exposure. 

Indicators

• VIX – Meager bounce yesterday, that saw most of its gains evaporate by the end of day. Nonetheless the bounce was much expected, and likely will continue into today, as it currently rests at 12.13. 
• T2108 (% of stocks trading below their 40-day moving average): Surprisingly higher yesterday, despite the market weakness. Though market breadth was slightly higher, but not enough to mask the strong weakness in tech. 
• Moving averages (SPX): Trading above all the major moving averages, but may see a test of the 5-day moving average today. 
• RELATED: Patterns to Profits: An Intro Trading Course

Industries to Watch Today

Energy showed a remarkable bounce and represented practically all the market gains from the day. Technology saw a steep sell-off that took price back to the 5-day moving average – definite area of concern coming into today. Utilities bounced, but still a sector in meltdown mode right now. Real Estate continues to soar higher, and looking at hitting new all-time highs again. Staples bear flagging again, which may lead to yet another leg lower in the sector. Industrials on the cusp of breaking through some heavy resistance.

My Market Sentiment

The dip buying is still alive as seen by yesterday’s afternoon rally, and seeing more of that again this morning, with the bulls trying to rally the futures off the overnight lows. For now, it is simply digesting recent price gains, and little to no damage on the charts. Nasdaq is showing more profit-taking than SPX, and it’s worth being a bit more cautious on the tech side. 

S&P 500 Technical Analysis

Current Stock Trading Portfolio Balance

• 6 Long Positions

Recent Stock Trades – See My Past Performance Here.