The Market Is Desperate For A Dead Cat Bounce

My Swing Trading Approach

I took small losses on my two trades from yesterday, as the market flushed the market down the toilet. Not looking to get short here, as the market is desperate for a dead cat bounce that is likely to come in the next few days. 

Indicators

  • Volatility Index (VIX) - With all the volatility yesterday, somehow, VIX managed to finish the day in negative territory. But the VIX hasn't been acting right for a while, with the conditions the way they have been of late, you'd think we'd be north of 30 at this point.  
  • T2108 (% of stocks trading above their 40-day moving average): Single digit reading of 9.44. This is extremely low and rare territory for the index and the lowest closing reading all year long. Watch for the flush in the market and eventual rebound. 
  • Moving averages (SPX): Trading below all the major moving averages. 

Sectors to Watch Today

Utilities were back to being the least impacted, however, it has sold off heavily the past four days. Energy is literally crashing. This sector has become severely discounted in recent days. The only other two sectors not forming new lows are Telecom and Technology. The latter of which is very surprising.

My Market Sentiment

The Fed, to my surprise, threw the market under the bus, and it wasn't just in his statement, but in his press conference too, Powell doubled down and even confirmed that he wasn't really worried about the market. At this point, major support has broken, but that doesn't mean it will go straight down from here. Shorts are at a point, where they have to think about covering their positions soon, and if the market flushes lower, I think you'll see that take place. 

S&P 500 Technical Analysis

(Click on image to enlarge)

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Current Stock Trading Portfolio Balance

  • 100% Cash

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