My Swing Trading Strategy

I stayed in cash most of the day, until then end, when I added a short position to the portfolio. Yesterday’s rally was impressive, but technically, it is doing little to fix the charts that were so heavily damaged last week and again this past Monday. The gaps down/up/down/up/down have made trading this market extremely difficult, and unless you are willing to chase, and then get burned in an opposite direction gap, the opportunities are very limited. 

Indicators

• Volatility Index (VIX) – Volatility h as been crushed over the last three days, going from almost 25, down to 16.91. 
• T2108 (% of stocks trading above their 40-day moving average): A 30% rally yesterday in this indicator took the daily reading back up to 42%. A hard recover off of the lows from Monday, but still an unhealthy reading for a market that has hovered the past two months at its all-time highs. 
• Moving averages (SPX): With a 54 point move yesterday, it managed to break back above the 5-day and 50-day moving averages. 
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Technology and all other growth sectors were the big winners on the day, and all 11 sectors finished higher on the day, but it was the staples that saw the weakest return overall. Should this bounce continue Technology and Discretionary should be your main focus of your trading. 

My Market Sentiment

The bulls had a most unexpected rally yesterday in terms of size and strength, managing to close at its highs on the day, while also tacking on a whooping 1.9% to the upside. The bulls slipped back into the uptrend that it broke on Monday, but will need to see some follow through today to confirm the move from yesterday.  

S&P 500 Technical Analysis

Current Stock Trading Portfolio Balance

• 1 short position.

Recent Stock Trades – See My Past Performance Here.