My Swing Trading Approach

I closed out my position in Netflix (NFLX) yesterday at $358.78 for a +3.6% profit, while also decreasing dramatically the overall long exposure, and increasing my short exposure. I will watch the early morning action to determine which side of the trade I want to add more to. If it can’t be determined, I’ll do nothing. 

Indicators

• Volatility Index (VIX) – Big time pop in the VIX yesterday without showing any sell-off before the end of the day, as has been the case of late, which increases the probability for further upside in the days that follow. 
• T2108 (% of stocks trading above their 40-day moving average): A 4.5% decline yesterday that wiped out most of last week’s gains. Look for a push from the current reading of 49% down to the 44-45% range. 
• Moving averages (SPX): Barely held the 10-day moving average, while testing the 20-day MA and holding so far. Both will be back in play again today. A break would likely result in a retest of the month’s lows. 
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Utilities paving the way for a burst higher and out of consolidation from the past two weeks. Materials were strong yesterday but overall the sector remains weak with continued lower-highs on the daily chart. Energy remains in a sideways trading pattern. Industrials perhaps the strongest sector of the month so far. Technology and Discretionary have put in very concerning candles yesterday to potentially establish a lower-high here. 

My Market Sentiment

The bulls appear to be be losing some of its grip following yesterday’s sell-off, and broad based profit taking in the tech sector. Most of your momentum stocks saw large losses as well. 

S&P 500 Technical Analysis

Current Stock Trading Portfolio Balance

• 1 Long Position, 1 Short Position

Recent Stock Trades – See My Past Performance Here.