Breaking Out Of The Box

My Swing Trading Approach

I reduced my long exposure some on Friday, but still maintain 30% long and 70% cash. So if the market gap higher this morning can hold up, I’ll look to add more to the long side.

Indicators

VIX – Sold-off hard to the downside. Friday sold off another 5.8% and now in a free-fall as it broke down and out of recent consolidation.

T2108 (% of stocks trading below their 40-day moving average): Sticking near the recent highs, and not breaking down at all. Stocks as a whole are trying to improve, with 46% now trading above their 40-day MA.

Moving averages (SPX): Tested and held the 5 and 20-day moving averages. Nearing a test of the 50-day moving average. A break of that MA would be a big deal for the market.

Industries to Watch Today

Utilities led the way, followed by Energy and Real Estate. Financials had the biggest hit, and suddenly looks very problematic following the first batch of earnings released on Friday.

My Market Sentiment

Friday started off well for the bulls, but the lack of follow through and ultimately the head fake that ensued, continues to frustrate traders. Breaking out of the box will continue to be key for traders moving forward and establishing a firm direction for the market.

S&P 500 Technical Analysis