Can The Market Break The Highs?

My Swing Trading Approach

While the last three days have been solid for the bulls, it is coming on fairly low volume overall. As a result, I may pause here and let the current positions do the work, while making sure that I don’t stack my portfolio with too many more positions, until the market can demonstrate it can break the highs from earlier this month.

Indicators

Volatility Index (VIX) – I still think that the VIX is headed back towards the 10-11 area as the chart suggests. But a bottom here, would make for a good argument that it could pop over 15-16.

T2108 (% of stocks trading above their 40-day moving average): Trading higher in four of the last five trading sessions, and now providing a reading of 58%. A move over 60% would be a positive development for the market as a whole.

Moving averages (SPX): Trading above all the major moving averages.

Sectors to Watch Today

Discretionary nearing a breakout of the bull flag and led the way yesterday. Needs to break the series of lower-high that is currently on the chart in the short-term. Energy has been bouncing hard over the last three sessions, but I am skeptical of oil until it breaks out of the range. Industrials happens to be one of the best looking sectors right now – made a new higher-high yesterday. Materials has all the makings of a dead cat bounce. Technology overdue for a move, but nothing yet.

My Market Sentiment

I’m still skeptical of the overall market, and its ability to sustain any meaningful gains, until we see that break over the all-time highs established in January. The market has managed to churn higher since the April lows were established, but it hasn’t been without an incredible amount of choppiness.

S&P 500 Technical Analysis