My Swing Trading Approach

There is a solid possibility that I put a couple of short positions to work today. Plenty of trade setups to the downside are out there, and bears may be hitting the end of this dead cat bounce. If not, then I will look to continue playing the long side. Flexibility is key here. 

Indicators

• VIX - Broke a five day losing streak with a small bounce. Despite the selling in the VIX - it does remain quite elevated at 19.46. Stay cautious. 

• T2108 (% of stocks trading below their 40-day moving average): Up for a sixth straight day to close last week at 33%. Quite weak, and I would have expected for it to be much higher considering how much we have rallied over the last six trading sessions. 

• Moving averages (SPX): Managed to still hold the 50-day moving average, but rejected at the 20-day MA. 

Industries to Watch Today

Utilities continue to lead the way for the past two trading sessions, which is a sign that safety is being sought in light of the market rally. Real Estate, which has been quite bearish of late was also strong. Energy continued its weakness. Technology, Consumer Cyclical and Basic Materials - all market leaders during the bounce - struggled. 

My Market Sentiment

The bulls showed signs on Friday that they might be running out of gas. Also, plenty of charts out there with individual stocks showing the technicals hitting resistance and seeing some rejection. I would be careful with price action to the long side, unless the bulls can put together a solid bounce off of the lows of the day. 

S&P 500 Technical Analysis

Current Stock Trading Portfolio Balance

• 3 Long positions