My Swing Trading Strategy

With yesterday’s pop at the open of the trading session, I was taken out of my position in SPXU for a +2.8% profit. Now the market is looking at reversing yesterday’s gains on the indices and I may be getting right back in to the short side, despite having added two long positions yesterday, expecting a multi-day rally for the market. That’s okay, these are crazy times, and I’ll have to take a hit early on, but there is definitely some panic showing up in the market today that was lacking on Monday’s sell-off. 

Indicators

  • Volatility Index (VIX) – Look for a pop at the open to take the VIX back above 20 at the open, and at least a 15% move. The market is showing signs of real panic this morning, and I expect this indicator to pop well into the 20’s today. 
  • T2108 (% of stocks trading above their 40-day moving average): An 11% move yesterday but did little to change the current trajectory of the indicator. Still bearish overall, and likely to rapidly deteriorate today at the market open. 
  • Moving averages (SPX): Reclaimed the 5-day and 10-day moving averages, but rejected at the 50-day yesterday. But expect today for the 5 and 10-day MA’s to be lost at the open, and for the market to push towards the 200-day MA. 
  • RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Technology was the big winner of the day and where the volume in the trading session flowed mainly towards. Utilities and Real Estate saw the least amount of interest, but will likely be the targets today of investors looking for safe havens. Despite the gains across the board, no one sector did anything to drastically improve their charts. 
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My Market Sentiment

SPX (as well as all of the other indices) are looking at a huge gap lower today, as recession fears take over, 30-year bond yields are hitting all-time lows, and the bulls can’t find a buyer insight. This isn’t a day to be a hero and buy the dip, but to follow the direction the market is attempting to provide here. The potential for a -100 or more day to the the downside is very real, and this early morning panic selling should be taken very seriously. 

S&P 500 Technical Analysis

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Current Stock Trading Portfolio Balance

  • 2 Long positions. 

Recent Stock Trades – See My Past Performance Here. 

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