My Swing Trading Approach

Nothing much going yesterday. I didn’t like the risk/reward to the downside, which in hindsight wasn’t actually all that bad considering the extent of the sell-off. I did play the bounce in Amazon early on, and while it looked promising, fell apart in the afternoon. Today I will look to play the long side if the morning strength can stick, otherwise, I’ll be looking to fade the gap up. 

Indicators

• Volatility Index (VIX) – As nice of a  move higher that the VIX had yesterday, what is crazy is that it hasn’t even broken an of the previous highs, not even the previous highs for the month, much less October’s highs. Currently at 24.52. 
• T2108 (% of stocks trading above their 40-day moving average): Full fledged breakdown on the T2108 and getting closer to its October lows. Dropped a crazy 45% yesterday taking the reading to 10.9%. A very rare oversold reading ahead of the FOMC meeting tomorrow.  
• Moving averages (SPX): Trading below all the major moving averages. 
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Utilities and Real Estate led the way lower yesterday. That is a huge concern for this market as they were the safe havens for traders and when even those sectors are getting pummeled in a sell-off, then cash becomes king. 

My Market Sentiment

SPX managed to break key support yesterday, and even momentarily, trade below February’s lows. The market is in bad shape right now and a bounce is critical today and tomorrow, to keep the market from completely falling apart. 

S&P 500 Technical Analysis

Current Stock Trading Portfolio Balance

• 100% Cash

Recent Stock Trades – See My Past Performance Here.