Weakness Coming Into The Market

My Swing Trading Approach

It remains to be seen whether the bulls are going to manage a “buy the dip” reaction to the morning’s pre-market gap down. Should that happen, I’ll likely add to the long exposure already in the portfolio. Should it not, reconsidering the short side comes into view yet again.

Indicators

Volatility Index (VIX) – Retest of the declining trend-line off of the 2/9 highs will be back in focus again, after getting rejected at that spot on Monday.

T2108 (% of stocks trading above their 40-day moving average): Huge bounce yesterday saw an 11% move back up to 53%. Much needed, and keeps the indicator from breaking down for now. Though Monday’s support could be tested today.

Moving averages (SPX): Managed to recapture the 20-day MA, and barely the 10-day MA, but rejected at the 5-day MA. Expect for a retest of the 20-day again today.

Sectors to Watch Today

Staples finally managed to bounce, after six straight days of selling. Financials also managed to put together a hard bounce, but little has been done to improve its technical outlook here – still working on a short-term double top. Industrials started off strong, but languished in the afternoon – still a strong chart with a healthy trend in place. Technology could be coiling for another move to all-time highs.

My Market Sentiment

A lot of weakness coming into the market this morning. Breadth has been a key indicator of where this market wants to go each day, and will, no doubt, be one of the telltale signs for today as well. Yesterday’s bounce was pretty solid, and kept the higher-highs and higher-lows in place on the trend-line that started on June 28th. Most of your gaps of late have been faded intraday.

S&P 500 Technical Analysis