My Swing Trading Approach

I haven't added any new positions to the portfolio since Monday, mainly because it was obvious this market was due for a pullback and adding new positions here made zero sense. Use the pullback to find some good trade setups that will naturally bounce should the market eventually resume the trend higher. 

Indicators

• Volatility Index (VIX) - Closed below 20 for the first time since 12/3 after having been above 36 just over two weeks ago. Good chance to see a strong reflex bounce here. 
• T2108 (% of stocks trading above their 40-day moving average): Another 23% move. Amazing moves, but unsustainable - even in a dead cat bounce. Currently at 46% and ready for a pullback here. 
• Moving averages (SPX): No major changes on this front yesterday. Still looking for a possible test of the 50-day moving average.

Sectors to Watch Today

Good chance Utilities will garner some interest today. All of your other sectors have run hot over the last two weeks, and are in desperate need to cool off here. Even Energy is extremely overbought. They all are. 

My Market Sentiment

Starting to see some profit taking in the AM. The bulls are going to have a hard time keeping things going here without a simple pullback first. Preserve capital. Support shown in the chart below must hold. 

S&P 500 Technical Analysis

(Click on image to enlarge)

Current Stock Trading Portfolio Balance

• 20% long.