Headline Risk

My Swing Trading Approach

I didn’t add any new trades to the portfolio yesterday, but may look to do so on the morning weakness we are seeing so far in the pre-market. I will also be increasing my stops-losses on my existing and profitable positions.

Indicators

Volatility Index (VIX) – The indicator managed to reverse course and push 3% higher in a divergence from general price action. Likely to spike in the morning trading as well.

T2108 (% of stocks trading above their 40-day moving average): With the S&P 500 now trading at all-time highs, only 62% are trading above their 40-day moving average. The bearish divergence that was there before, is quickly getting erased.

Moving averages (SPX): Trading above all the major moving averages.

Sectors to Watch Today

Telecom was yesterday’s big winner as it continues to push out of its base. Discretionary broke the descending trend-line off of the June highs, which is a big development for those stocks, and a new higher-high has finally been established. Industrials, continues its breakout. Technology in a triangle pattern continues to narrow its range, setting up for a possible breakout.

My Market Sentiment

There’s headline risk out there today, with Michael Cohen’s plea deal. Frankly, I don’t expect it to have any impact on the market going forward as the matter doesn’t represent any real risk to the Trump administration. Technically speaking the bulls managed to hit new all-time intraday highs, but couldn’t close above it. I suspect that will happen fairly soon.

S&P 500 Technical Analysis