Market Sell-Off

My Swing Trading Approach

Once again, yesterday was a day of day-trades for me. I faded the early market intraday bounce yesterday twice, First time, I was quickly stopped out for a small loss, and the second time I profited, allowing me to be profitable overall on the day, despite a market sell-off. Today, I plan to play the bounce to the upside, but may only be as a day-trade. 

Indicators

  • Volatility Index (VIX ) - VIX is only at 22.48 following yesterday's massive sell-off. I would have suspected a bigger rise than yesterday's 11.8%. Still lower-highs since October - certainly a bullish divergence there. 
  • T2108 (% of stocks trading above their 40-day moving average): Bull flag on this indicator finally broke down, with a 20% drop to 23%. Still well off the lows of October. Again a bullish divergence considering yesterday closed below any of the closing levels from October. 
  • Moving averages (SPX ): Currently trading below all the major moving averages here. 

Sectors to Watch Today

Technology changed its tune by not leading to the downside yesterday. In fact it was the fourth strongest sector yesterday. Energy remains in a free-fall - stay away. Staples had been a market leader of late, but is falling apart and looks poised to eventually test its October lows again. Discretionary formed a doji candle and possible bottom - looks like a possible wash-out.

My MarketSentiment 

Massive sell-off yesterday, that really didn't test any major support levels, and is simply left in no-man's land. Good chance we see a bounce heading into the Thanksgiving holiday, but its sustainability is questionable at best. Still best to probably day-trade this market. 

S&P 500 Technical Analysis

swing trading strategy report 332

Current Stock Trading Portfolio Balance

  • 100% Cash.

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