My Swing Trading Strategy

I didn’t add any new positions on Friday, and I’m coming into the new trading session today 100% cash. Reason why I didn’t by the ramp, because it wasn’t worth it to me to take on the risk over the weekend, for a simple hour of bullishness ahead of the close. I will look to play the bounce today, if it can hold, otherwise, I will fade the strength if it can’t hold. 

Indicators

  • Volatility Index (VIX) – Tested the 50-day moving average and was quickly rejected, and finished in the red for the first time in five trading sessions. Bearish engulfing candle pattern too. 
  • T2108 (% of stocks trading above their 40-day moving average): Another 5% drop, and its ninth drop in the last ten trading sessions. Showing signs that the market may be ready for a quick bounce here .
  • Moving averages (SPX): Looks like it will test the 200-day moving average today at the open. Still a good chance we see a test of the 50-day MA in the coming weeks. 
  • RELATEDPatterns to Profits: Training Course

Sectors to Watch Today

Energy has been a disaster of late – a lot of double tops in individual names. I’d stay away from Industrials today, as Boeing (BA) will no doubt way heavy on that sector today with its second plane crash. A lot of names  are setting up with bull flags in the Utility sector. And if you are looking to play the bounce today, focus in on Discretionary and Technology.  
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My Market Sentiment

Impressive rallying of the troops into the close on Friday, to avoid a meltdowon for the week as a whole. Nonetheless, plenty of reason to be skeptical of this market coming into the week, but it may take a bounce first before we see the selling resume. Stay cautious with your trades and tight with your stops. 

S&P 500 Technical Analysis

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Current Stock Trading Portfolio Balance

  • 100% Cash.

Recent Stock Trades – See My Past Performance Here.