My Swing Trading Approach

I took two swing-trades yesterday, and managed to hold them overnight, which has been a rarity of late. They are poised to gap higher with pre-market strength. I will look at adding another position today, but won’t be overly aggressive in doing so.  

Indicators

• Volatility Index (VIX) – While SPX finished higher, volatility managed to do the same, but at a nominal rate. Look for a move into the 18’s today, as the bulls continue to push higher off the lows established last week. 
• T2108 (% of stocks trading above their 40-day moving average): While large caps were strong, the small caps really struggled and it was reflected in T2108 with a 5% decline back to 32%. Chart still bullish over the last month though. 
• Moving averages (SPX): The 5-day moving average broke Monday, and held strong yesterday. Expect a test of the 10-day today. 
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Sectors to Watch Today

Anything related to Materials, I have avoided like the plague. Instead of rallying this week, it is extending its losses from last week, and now looking to possibly break its lows from late October. Energy is right behind it, with very little improvement to the daily chart. A doji hammer did form yesterday that suggests a short-term bottom could be forming, but I wouldn’t play it. Utilities are quite amazing right now, and they are back near their all-time highs. 

My Market Sentiment

I am always cautious of the gap ups these days, as they have often struggled to hold, but Monday’s rally proved otherwise, and will need to do so again, to keep the confidence of the bulls in place. Headline risks include Jerome Powell speaking today, and Trump/Chinese tariffs news. The death-cross is all but likely at some point next week with the 50/200-day cross to the downside. 

S&P 500 Technical Analysis

Current Stock Trading Portfolio Balance

• 2 Long Positions

Recent Stock Trades – See My Past Performance Here.