My Swing Trading Approach
I am taking a wait and see approach following Tuesday’s head fake. The market needs to build some credibility with me today that it can sustain its gains, before I go adding something new again. Tuesday’s price action didn’t make for ideal trading conditions, and instead of committing more capital, I will look to remain on the sidelines today.
Indicators
- VIX – Recovered from Monday’s losses, with a 3.5% increase. Still within a 7-day range and could still make a move for 20 here.
- T2108 (% of stocks trading above their 40-day moving average): 7% bounce to 52%. Still facing some resistance at the 56% level.
- Moving averages (SPX): Opened above the 10-day moving average, but by the end of the day, dropped back below the 50-day and 5-day MA as well.
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Sectors to Watch Today
Technology really got beat up on Tuesday. Energy and Materials re-emerged as the market leaders after getting ripped apart in the day prior. Discretionary has been floating without real conviction of late. Financials could be staging another move lower here.
My Market Sentiment
Tuesday’s afternoon sell-off really cramped the market going forward, so that today would be quite a wild card as to what it would do. Futures are pointing higher, but morning gaps higher have had a tendency to get quickly filled and thereby casting some skepticism on whether the market can hold it together today.
S&P 500 Technical Analysis
Current Stock Trading Portfolio Balance
- 4 Long Positions
