My Swing Trading Approach

I added one additional long position yesterday to the portfolio, and will increase the stop-loss in both positions to protect profits. I will look to add a new position today, if the bulls can keep a handle on the market.

Indicators

• Volatility Index (VIX) – Hard reversal yesterday, with a 17.3% decline taking the VIX back down to 17.62. Well off of its highs in the 28’s, last week. Likely to see 14-15 range again before finding support. 
• T2108 (% of stocks trading above their 40-day moving average): Massive rally of 58% – typical of a market bounce, taking it back up to 21% overall. 
• Moving averages (SPX): Recaptured the 200-day moving average, as well as the steep, declining 5-day moving average. 
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Massive rally in Technology yesterday, which was absolutely critical to sustain the market bounce, while also recovering much of the losses from Wednesday and Thursday. Major rally in Healthcare as well and a market leader as long as this rally holds out. Discretionary bounced, but still has some resistance back from the lows established in July and August that needs to be broken. While Energy and Materials both bounced yesterday, it lagged the rest of the market. 

My Market Sentiment

It looks to me that this market has more upside to the bounce. Whether the bounce can be sustained into next week, remains a mystery, but the market is just starting to come out of oversold conditions here, with plenty of room to squeeze the shorts. With that said, don’t let go of profits when you have them and managing risk remains critical in these market conditions. So do it!  

S&P 500 Technical Analysis

Current Stock Trading Portfolio Balance

• 2 Long Position.

Recent Stock Trades – See My Past Performance Here.