My Swing Trading Approach

I have three positions currently in the portfolio. All profitable, but will need a pullback to justify adding a new position here. The market is certainly stretched and prime for some profit taking. Playing the dip is the best option here. 

Indicators

• Volatility Index (VIX) - VIX has bounced the last two times it has tested the 200-day moving average. It is right above it now and could see volatility come back if history repeats itself. 
• T2108 (% of stocks trading above their 40-day moving average): It continues to rise - truly the most meteoric rise I have ever seen in this indicator. Rose 11% to finish at 76%. The highest since 10/5/17. 
• Moving averages (SPX): Above all the major moving averages except for the 200-day MA. We could see a test of the MA in the very near future.

Sectors to Watch Today

Industrials were absolutely on fire and paced the market higher.  Technology broke above December resistance, while Energy broke out of its bull flag pattern. Financials have rallied 16 out of the last 17 trading days. Truly amazing, but probably ready for some profit taking. 

My Market Sentiment

It isn't a surprise that the market is weak coming into today, following the massive four-day rally last week. What is key today is that we don't see panic selling or mass profit taking. Pulling back and closing inside of Friday's candle body will be important. Also, the downtrend off of the October highs could be tested this week, and the bulls will need to break through it. 

S&P 500 Technical Analysis

(Click on image to enlarge)

Current Stock Trading Portfolio Balance

• 30% Long.