My Swing Trading Approach

Good decision on my part not to add any new long positions yesterday, considering the pre-market weakness I’m seeing ahead of the open. If the bulls buy the dip, I may use it as an opportunity to add some more long exposure, but either way, caution is warranted until the morning weakness resolves itself. Raise the stops!

Indicators

• Volatility Index (VIX) – Managed to trade flat on the day, with just a small amount of strength. Holding the 12 price level. A break below 11.50 could ultimately take VIX back into single digits again. 
• T2108 (% of stocks trading above their 40-day moving average): Bearish divergence is still quite bothersome, despite yesterday’s 4% rally to 57%
• Moving averages (SPX): Continues to hug the 5-day moving average as price trucks higher. 
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Financials continues to see traders flowing into this beaten down sector throughout all of 2018. Higher-high and higher-low in place. Downtrend off the January highs has broken as well. Industrials improving but still stuck in a range that can’t really be trusted. Energy attracted the dip buyers yesterday, but the volatility of late has made it a very difficult sector to trade. Technology is still the stop sector to play. Discretionary continues to climb. Healthcare right up there with Technology in terms of sector strength. Telecom, Staples, Real Estate and Utilities all sectors I would avoid here. 

My Market Sentiment

Potential pullback in the works ahead of the market open. First and foremost, the market needs to hold support at the March highs and not drop back beneath. Ideally, the market buys the dip and continues its track toward the all-time highs established in January. Volume remains extremely light. SPY volume was in line with the half day of volume on July 3rd. 

S&P 500 Technical Analysis

Current Stock Trading Portfolio Balance

• 5 Long Positions

Recent Stock Trades – See My Past Performance Here.