My Swing Trading Strategy

No new positions for me yesterday as I sit in 100% cash and watching as this market drops. Once I see a sign that there has been a panic flush out to the downside, I will consider a long position. Chasing short positions at this juncture isn’t ideal from a  reward/risk stand point. 

Indicators

• Volatility Index (VIX) – Another big move in the $VIX that takes it 11% higher to 20.56 and above the critical risk-on/risk-off level. 
• T2108 (% of stocks trading above their 40-day moving average): This indicator is falling apart hard and fast. A 24% yesterday takes it all the way down to 39% overall. Likely to see a test of the May and August lows in the near future. .
• Moving averages (SPX) About 50 points above the 200-day moving average. Another day of selling like yesterday would take price below it. Currently trading below all other moving averages.  
• RELATED: Patterns to Profits: Training Course

Sectors to Watch Today

All of the sectors traded lower yesterday while the ones showing the most relative strength were those found in the defensive sectors. Surprisingly, Technology and Discretionary have not been hit as hard as the rest of the sectors and instead have simply floated around in the middle of the pack. 

My Market Sentiment

Double top pattern is certainly forming on SPX and has price back into the dreaded August trading range. However, if those August lows are taken out, this market will likely drift much much lower. Strong chance we see a test of the 200-day moving average before the end of this week. 

Current Stock Trading Portfolio Balance

• 100% Cash.

Recent Stock Trades – See My Past Performance Here.