My Swing Trading Approach

I added one new long positions yesterday and look to add another today in the early going. However, tight stops are necessary as it won’t take much for this market to reverse course and trend lower yet again. 

Indicators

• Volatility Index (VIX) – Matched its highs exactly from last Thursday, but failed to press through and past the October highs. 
• T2108 (% of stocks trading above their 40-day moving average): Rallied out of the teens yesterday and back up to 23%, but still down 10% yesterday. The indicator is showing some relative strength since the October lows were established. 
• Moving averages (SPX): Trading well below all major moving averages, but that could change today with the 5-day moving average if the early morning strength can hold. 
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Technology  was the market leader yesterday, which was important for the bulls to establish, because a market rally will only be as good as the tech sector. It has to lead. Healthcare avoiding a lower-low with a strong bounce off of the 200-day moving average yesterday. Industrials broke their October lows yesterday but quickly bounced, creating a potential double bottom scenario. Financials are in line for a significant bounce, as they have become extremely oversold. 

My Market Sentiment

Another big gap – this time it is to the upside. I am looking for the market to rally hard today, following a great deal of selling from last week and yesterday saw some capitulation with a washout well below October’s lows. Support held at key levels at the close forming a doji hammer candle that typically provides a good jump start to a market rally.  

S&P 500 Technical Analysis

Current Stock Trading Portfolio Balance

• 1 Long Position

Recent Stock Trades – See My Past Performance Here.