Swing Trade Approach:

Took some small gains off the table of trades Amgen (AMGN) and Starbucks (SBUX) that simply wasn’t providing enough return for the risk I was taking. Got knocked out of my Micron (MU) short trade at the open, following that damn upgrade they received this morning. Overall, I was fine with the returns of the portfolio. Uber Technologies (UBER) remains a solid star for me, but now you have the escalation in the US/Iran conflict that initially resulted in 50 handles to the downside on SPX, but has since recovered about 80% of those losses as of this writing, and is starting to look like the US won’t counter with any additional actions of their own. However, I am still prepared for tomorrow to be a volatile session, and ready to take positions off the table where I must. 

Indicators

  • Volatility Index (VIX) – Dropped 0.4% today, but expect this indicator to come alive tomorrow, especially if further escalation takes place here. 
  • T2108 (% of stocks trading above their 40-day moving average): A 6% drop taking the indicator down to 60%. Huge potential for further downside in this indicator depending on what happens tomorrow. 
  • Moving averages (SPX): Closed below the 5-day moving average but managed to hold the 10-day MA. Looks like there will be a break below the 10-day tomorrow. 
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Sectors to Watch Today

Energy is likely to be the safest play tomorrow considering the tension in the middle east between the US and Iran. Also there should be pockets of strength in Materials and Defense Contractors. Also, your traditional safe sectors like Utilities and Real Estate could catch a bid. Technology should be weak as will Discretionary. 
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My Market Sentiment

There’s a lot of risk in the headlines tonight. SPX futs were down over 50 points at one point but has since recovered 80% of those losses. However the night is long, and we could still see the market sell-off again. First and foremost watch the rising trend-line off of the October lows. If that breaks, then the 50-day MA could eventually be in play for the bears. Those are the two areas I would watch on Wednesday. swing trading strategy outlook 570