My Swing Trading Strategy

I added two new trades to the portfolio yesterday. Having gotten out of SPXU on Tuesday was a sigh of relief, as yesterday’s rally in SPX would have otherwise wiped out my profits. On the flip side, I had to bail on my SBUX position yesterday due to a gap down to my stop-loss. I’ll be looking to add 1-2 new positions today. 

Indicators

• Volatility Index (VIX) – The Volatility Index dropped 12% yesterday all the way down to 17. Consider that just on Tuesday, this index was trading above 21, and there’s no doubt, the VIX has been getting crushed since. Expect another  big dip today, as stocks are gapping up across the board. 
• T2108 (% of stocks trading above their 40-day moving average): A reading above 41% is huge for the indicator, and one that hasn’t been seen since the early-going of August. Today could even make a play for 50% following its 18% move yesterday.  
• Moving averages (SPX): Literally sitting on the 50-day moving average on SPY, but just a shade below on SPX. Expect a break on both today.  
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

Technology and Industrials are likely to see the most buying today. Materials will also see some strength, while I expect Utilities, Real Estate and Staples to be the laggards of the group today. 

My Market Sentiment

This market becomes much more bullish today if the morning gap above the 50-day moving average can hold through the close. If that happens, we finally breakout of a month-long consolidation pattern that should eventually see price challenge the all-time highs again. 

Current Stock Trading Portfolio Balance

• 3 Long Positions

Recent Stock Trades – See My Past Performance Here.