My Swing Trading Approach

I didn’t pull the trigger on any new trades yesterday, as I wanted to hold out until today to see whether the market would provide us with the necessary follow through to the upside. I also booked some profits yesterday in one of my trades, as price action faded into the close. I will look to add another position to the portfolio today if the bulls can swing together another solid day to the upside.  

Indicators

  • Volatility Index (VIX) – Rejection at the declining trend-line off of the 2/9 highs holds strong once again. Down 8.1% to 13.45. A break of this trend-line would be concerning. 
  • T2108 (% of stocks trading above their 40-day moving average): A solid 11% pop to 52%. This indicator has been back and forth all week long – incredible volatility in the breadth this week making for difficult trading conditions. 
  • Moving averages (SPX): Back above the 5-day and 20-day moving averages, while unable to close above the 10-day MA. Watch for a potential 5/20 downside crossover. 

    • Sectors to Watch Today

    Telecom was the big winner yesterday, and looking to put in a new higher-high on its existing trend-line off of the 5/31 lows. Utilities breaking out to the upside and through major resistance. Massive bounce out of Staples, thanks in large part to Walmart (WMT) earnings. Industrials sporting a similar path in the short-term to Staples – I suspect that it will see further buying interest. Energy – stay away. No direction in the tech sector and still waffling with finding a clear path forward. Stuck in a narrowing range of lower-highs and higher-lows.

    My Market Sentiment

    Unable to close above Tuesday’s highs, which would have shown a lot of conviction for the bulls, but it did manage to close above Tuesday’s closing price, which is still a good thing. This market has been back and forth all week long and frustrating for traders in general.

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