Volume Is Extremely Light

My Swing Trading Approach

At least standby for the first 30 minutes of trading this morning before making any decision on market direction. Volume picked up on the selling to the downside on Friday with an above average volume reading. I will not be making a ton of moves today as I remain nimble and uncommitted to a hard direction in this market.

Indicators

Volatility Index (VIX) – Biggest spike in a very long time on the VIX index – biggest since June. A 16.8% move to 13.16. Still in the downtrend, but if that breaks, a challenge of the June highs could be in order in the 19’s.

T2108 (% of stocks trading above their 40-day moving average): A 7% decline on Friday, demonstrated a willingness to move lower in the days ahead, and that the bearish divergence seen in this indicator, may finally be impacting price action on the indices.

Moving averages (SPX): Broke the 5-day and 10-day moving average, but managed to find support at the 20-day MA.

Sectors to Watch Today

Energy showed relative strength, but remains stuck in a sideways trading range over the past month. Discretionary sporting a possible lower-high here. Possible double top pattern in Real Estate. Hard decline in Staples for a fifth straight day and back below its support at the 200-day MA. Materials finally broke the 200-day MA and in breakdown mode.

My Market Sentiment

Following Friday’s decline, price action is now testing the rising trend-line off of the June lows. Break that level, and it is likely it goes to 2801 for a retest. Volume is extremely light, except for Friday, of course, so I don’t expect any major moves to the upside from this market today. Pre-market weakness has been completely erased ahead of the market open.

S&P 500 Technical Analysis