My Swing Trading Approach

I’ve added two new long positions to the portfolio following yesterday’s bounce off of the lows of the day. Of course, this market is on shaky ground and in order to add additional exposure I will need to see the market can bounce today. 

Indicators

• Volatility Index (VIX) – VIX continues to rise for the fourth time in the last five trading sessions, but the level of conviction is lacking to that of what we saw back in early October. Currently at 21.25. 
• T2108 (% of stocks trading above their 40-day moving average): Continues to exhibit a bull flag and only dipped 7% yesterday to sit at 30%. 
• Moving averages (SPX): Gapped above the 20-day moving average and failed to hold it by finishing the day below all the major moving averages for a third straight day. 
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Energy finally bounced to provide the stock market some early morning strength, but that quickly faded as the day gave up mush of its gains. Yesterday’s gains looks marginal at best and hasn’t done anything to reverse the recent bearishness in the sector.  Telecom surged late in the day, to be the market’s leader and is currently holding on to one of the more bullish charts. Discretionary and Financials holding on to their inverse head and shoulders pattern, but Healthcare looks concerning as it gives up gains for a fifth straight day, and takes price back to the 200-day moving average. 

My Market Sentiment

Volume finally picked up in this sell-off, as volume rose above its average reading for the first time in this five day sell-off. SPX has traded lower 27 of the last 39 trading sessions, which is the worst that has been seen since 2008. SPX setting up for a bounce here, and potential inverse head and shoulders chart pattern, but the latter will need the former to keep it alive today. 

S&P 500 Technical Analysis

Current Stock Trading Portfolio Balance

• 2 Long Positions. 

Recent Stock Trades – See My Past Performance Here.