The Four-Day Consolidation Pattern

My Swing Trading Approach

I went from a neutral portfolio to adding two new long positions and closing out my short position yesterday. I’ll look to add another long position today, if the market is able to follow through to the upside yet again today.

Indicators

Volatility Index (VIX) – Dropped 6.3% yesterday. Could easily go either way form here. The upside potential remains. Going back to mid July – it has spent most of its time in a sideways range.

T2108 (% of stocks trading above their 40-day moving average): Despite the market’s strong move yesterday, T2108 only saw a 3.1% increase. Breadth sucks in this market, and makes it a stock picking market.

Moving averages (SPX?): SPX bounced off of the 10 and 20-day moving averages yesterday while also reclaiming the 5-day moving average.

Sectors to Watch Today

Energy was the market’s leader yesterday, and drove most of the day’s gains. Technology faded considerably at the close, despite being a market leader early on. Holding the 50-day moving average. Healthcare bounced back following its two-day decline and ready to test its all-time highs again.

My Market Sentiment

Bullish price action yesterday where the rising trend-line held and pushed prices back towards the all-time highs. Follow through today will be important to break out of the four-day consolidation pattern the market has been in.

S&P 500 Technical Analysis