My Swing Trading Strategy
I booked profits yesterday afternoon in Shopify (SHOP) for a +9.1% profit. It was a trade that I had been riding since last Friday. I still have two other positions, but may be cautious about adding another long setup to the portfolio ahead of the Fed’s Jackson Hole meeting tomorrow morning.
Indicators
- Volatility Index (VIX) – The lowest closing reading yesterday for the month of August following a 9.7% decline that took the index down to 15.8.
- T2108 (% of stocks trading above their 40-day moving average): A 9% increase in the indicator, but still under 40%, which is surprising considering how close price is to all-time highs. Considering SPX is only about 100 points away from fresh all-time highs, individual stocks aren’t rallying as hard as the price action would suggest on SPX for the past five trading sessions.
- Moving averages (SPX): Still not able to break through that 20-day moving average, but the 5-day MA is about to cross back above the 10-day MA.
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Sectors to Watch Today
Technology and Energy were tied for the market leaders yesterday and paced the market higher. The former is facing resistance today with the 20 and 50-day moving averages. While the latter had a nice bounce yesterday, the daily chart still remains very bearish and worth staying away from for the time being. Utilities rallied in a big way, and poised to challenge for new all-time highs on a breakout. Declining trend-line on Healthcare off of the July highs could see a break today. Telecom emerging out of its base very well with support at the 200-day moving average. Financials continues to struggle on the daily as well as does Materials. 
My Market Sentiment
Price action on SPX remains fixed in a three week consolidation pattern as shown in the green box below. The 20-day moving average remains a challenge for the bulls to push through, and with the Jackson Hole meeting tomorrow, price action can go either way at this point. A lot of headline risk with that event that can send price sharply higher or lower, depending on what is said. Personally, I think this market could be setting up for a nasty rug pull tomorrow.
Current Stock Trading Portfolio Balance
- 2 Long Positions.
