My Swing Trading Approach

I’ve held off adding new positions to the portfolio the last two days. My approach may be the same again here, as I simply show caution, move up my stops, and let the market play out. I may add a short position, depending on whether the bears can sustain the selling. But often times, Monday morning gap downs can be difficult to sustain. 

Indicators

• VIX – Even with some heavy selling on Friday early on with the indices, the VIX wasn’t moving as much as you’d expect. Stuck in consolidation near recent lows, it is prime for a big move, it just hasn’t been seen yet. 
• T2108 (% of stocks trading below their 40-day moving average): Stocks under the surface are eroding at a much faster clip than what the indices are showing. Last week saw a 10% decline in the percentage of stocks trading above their 40-day MA. 
• Moving averages (SPX): Lost the 5-day moving average, and likely to test the 10-day and 20-day moving average today. 
• RELATED: Patterns to Profits: Free Training Course

Industries to Watch Today

Having Staples and Utilities leading the way higher, isn’t usually the best sign of an overall market that wants to push higher, and I suspect we’ll see more of that again today. Energy continues to be the biggest sector to avoid, with Financials right behind. Discretionary continues to roll will little to no roadblocks this far. 

My Market Sentiment

Great dip buy on Friday, that negated fears that the market would crumble under the escalating trade war tensions with China. Well, that is definitely not the case today, as these concerns are back on the forefront of trader’s minds. Watch the rising trend-line off of the May lows. If it breaks, a bigger draw down will likely be in order. 

S&P 500 Technical Analysis

Current Stock Trading Portfolio Balance

• 5 Long Positions

Recent Stock Trades – See My Past Performance Here.