Bearish Wedge Chart Pattern

My Swing Trading Approach

I took profits in Caterpillar (CATfor a +1.9% profit yesterday, while getting stopped out at the open in ROKU and PYPL. Currently I am short, and will gauge the market today for a potential bounce and quickly close my short position if need be. Either way, I expect to be very cautious in my trading approach in the market today. 

Indicators

  • Volatility Index (VIX) - VIX popped 21% yesterday but still gave up some of its gains from yesterday following an end of day rally to recover some of the market losses. Still managed to breakout of its recent consolidation. 
  • T2108 (% of stocks trading above their 40-day moving average): Dropped 12.4% yesterday down to 34%. The breadth in the overall market continues to weaken more and more. 
  • Moving averages (SPX): The 5, 10 and 20-day moving averages were broken, while the 50-day moving average could be tested today. 

Sectors to Watch Today

Utilities were flat today, which isn't unexpected considering the weakness in the overall market. Financials continues to struggle to provide any real direction going forward. Has been sideways since March. Telecom continues to trade well in a rising channel with support at the 50-day moving average. Staples had a major breakdown yesterday and confirmed a head and shoulders pattern too. Discretionary in a full-fledged breakdown and testing the 200-day moving average. Very bearish. Technology also breaking down, taking out its September lows.

My Market Sentiment

Bearish wedge chart pattern confirmed to the downside. Close to testing the 50-day moving average. SPX gave up its gains from September. Jobs number is weighing on the market today and could create further volatility as the day unfolds. 

S&P 500 Technical Analysis

swing trading strategy report 301

Current Stock Trading Portfolio Balance

  • 1 Short Position

Click here to download my Allocation Spreadsheet.

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