Swing Trading Strategy:

Can we make it two days in a row...

Futs are down about a half percent, but in terms of the kind of shock and awe that has been seen of late, it really doesn't seem all that bad - almost like a flat opening when you are used to the 5-7% gaps lower or higher. So there is potential here for the bulls to continue the rally from yesterday. It'll suck in plenty of more buyers but ultimately, I am doubtful that it will lead to anything notable. Eventually, we are probably going to retest the lows again, and possibly even break them. 

In the meantime I am open to playing this current market bounce but will do so with caution, and with a very short time frame in mind. 

Indicators

• Volatility Index (VIX) - VIX finished flat on the day yesterday, and that is certainly a concern going forward. The previous two days it fell when the market fell, and now rallying when the market is rallying. Very strange, and need more time to watch how the VIX unfolds to draw any conclusions from it. 
• T2108 (% of stocks trading above their 40-day moving average): One of the biggest percentage rallies for stocks in the last 100 years, and it was only enough to take the T2108 up 32%, to close at 2.5. Stocks are certainly depressed when so few of companies are able to recapture a 40-day moving average following a 10% rally, but that is the kind of conditions being dealt with right now. 
• Moving averages (SPX): First time since March 4th, that a significant trend-line was broken to the upside. Now the 10-day MA is in play, which has been a major deterrent of late. 
• RELATED: Patterns to Profits: Training Course

Swing Trading Strategy:

Enter the Fed (again)...

You're seeing a massive swing in the stock market today, after seeing futs limit down, and SPX looking at an 80 point gap lower, the Federal Reserve announced a slew of programs aimed to help stabilize the financial system. It may help the stock market today, but my biggest concern is how we've seen some pretty bold moves made by the Fed of late, and the price bump ultimately all fall apart before the market can even close the day out. Possibly the same is seen again here, I'm not sure, but I'm not going to jump right in, right away. 

Worth noting too, that these kind of announcements is what you come to expect during turmoil like this. I bought SH on Friday which was an inverse of the SPY (1:1), and I ended up making about +1.6% on it. It was a day-trade that really played out nicely. I could have held over the weekend, but would have been burned incredibly by doing so. 

As for today, I wait and see how this market responds to the Fed news, and whether it can hold the gains. If so, perhaps the market will finally put together a multi-day run. 

You can check out all of my trades that I have made in 2020 - where I have been solid in the green both months by clicking here. 

Indicators

• Volatility Index (VIX) - Heavy pullback of 8.2%, despite the fact SPX was down 104 points. That is not normal and a massive bullish divergence on the index to pay attention to. Currently sitting at 66.04. 
• T2108 (% of stocks trading above their 40-day moving average): A 22% drop taking the indicator back below 2% again. It has been phenomenal how long it has managed to close below 4% in the past 8 days .
• Moving averages (SPX): Currently trading below all the major moving averages. 
• RELATED: Patterns to Profits: Training Course

Swing Trading Strategy:

That was not a bounce, my friend...

Today had all the makings of a bounce - oh it looked ripe for the taking. Bears tried to push the market lower, but no, the bulls would prevail, and we were going to have a face rippin', short squeezing kind of day that would see the market rip 10% higher.  

But nope.

It was not to be. Instead we had a sideways, slightly higher kind of day because all the gains were flushed down the toilet at day's end. Yeah, the market was setting up for a run into the close, but sellers came in, full tilt, and gave us a nasty doji candle to finish the day out with. 

I took trades in Advanced Micro Devices (AMD) and Apple (AAPL) a try, and by the end I was out of them both with returns of +2.3% and -0.6%. My only two trades of the week, and guess what, I'm in the green for the week! Not a lot, but because I was disciplined  and picked and chose, and mainly just remained patient, I didn't take the bait on the multiple intraday rallies that failed this week. If I'm barely up and the market is way down, I'll be honest, I'm going to count that as a huge win. 

Tomorrow is Friday, and if we know anything about Fridays, we know it is an absolute train wreck to hold trades over the weekend of late. So unless they find the cure for the Coronavirus AND cancer as well, on top of sending a stimulus check of one million dollars to every american, then I will probably be in cash going into the weekend. 

You can check out all of my trades that I have made in 2020 - where I have been solid in the green both months by clicking here. 

Indicators

• Volatility Index (VIX) - A 5% decline on the VIX yesterday. Not much, and we are essentially range bounce between the 70's and 80's. The VIX has yet to come down, and today marked a great opportunity for the market bulls to do that, and they failed. 
• T2108 (% of stocks trading above their 40-day moving average): Today was a small cap rally of a bunch of trash stocks, that were rallying due to the massive run oil took today. Also retail saw an explosion to the upside. In all though, actually fell 6% down to 2.55%. Apple (AAPL) finished lower on the day - I can tell you this, it's no rally without AAPL.
• Moving averages (SPX): Currently trading below all the major moving averages. 
• RELATED: Patterns to Profits: Training Course