Following The Downtrend

My Swing Trading Approach

I am following the downtrend that the bulls are testing at the open today on SPX. Should it break, I will look to steadily increase my long exposure in the market, while protecting my profits in existing positions. 

Indicators

  • VIX - Hard breakdown on the VIX yesterday, that dropped it 8.8% to 13.42. broke out of the triangle it had previously been contained in. 
  • T2108 (% of stocks trading below their 40-day moving average): Back over 60% following yesterday's strong pop of 5.1%. 
  • Moving averages (SPX): Broke through the 50-day moving average for the first time since mid-April. The 100-day moving average looms overhead, and will be tested again. 

Industries to Watch Today

Energy and Technology was strong yet again. I expect these two sectors to continue remain strong going forward.   Tech actually formed a higher-high, which is a first for the bulls since March. Utilities continues to weaken and should be avoided, along with Staples. Financials coming out of its double bottom base - very bullish. 

My Market Sentiment

Downtrend close to being tested here. I suspect we will gap above resistance at the open, and then it becomes key for the bulls to close above it at the market close. Broke the stubborn 50-day moving average on SPX, and that was a big achievement for the market. Careful of potential profit taking in the days ahead. 

S&P 500 Technical Analysis

swing trading strategy report 198

Current Stock Trading Portfolio Balance

  • 5 Long Positions

Click here to download my Allocation Spreadsheet. 

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