I have to first start by saying that we had an epic day in the Boom Factory. My man, Kunal, picked up a ridiculous amount of stocks that rocketed through the roof. It was hard to believe that the market was down during all of the Boom Factory exuberance.
BUT, nothing has changed!
This is still a very tough world to be in for swing traders. Day traders own the market right now and quality long swings are very hard to come by. It’s easy to find stocks in a general uptrend. The difficult part is getting in them and NOT getting stopped out with all of intraday chop.
Check out the SPY chart below. No matter what people might say, this is bearish. Swinging longs against a bearish market decreases the odds of winning significantly. Your focus, as a swinger, needs to be on very low risk trades and ideally in sectors with strength (unfortunately, that’s changing everyday).
SPX chart notes note:
- We’re still trading in a downward channel
- SMA20 and SMA50 are now meeting. That creates even more resistance if SPX attempts to break out of this channel
- Volume is on its third down day. This can be interpreted a few ways, but the easiest way to see this is that money is sliding to the sidelines. Absolutely no one knows where the market is going tomorrow and the swingers are not very willing to invest much capital (understandable).
- I mentioned the correction channel, but Stochastics (5,3) is nearing ‘high levels’. This tells us that even if SPX gets out of the channel to the upside, it may not have the energy to get much more.. In other words, a head-fake that destroys new longs.
So, what do need to see that confidence is returning and maybe some swings will be favorable?
Obviously the first step is to get out of this channel. In doing so. SPX should also get over SMA20 and SMA50. That’s a big move and will likely be viewed as strength. However, the market is emotional and the most important barrier will be 1300. If we can close above 1300, the bulls will gain some confidence. Until then, I will swing a very small percentage of my portfolio and stick, instead, to the fun in the Boom Factory.
Quick look at the Swing Watch List:
Stocks that stopped out:
DE 2.77% gain
LAVA -1.89% loss
TTI .91% gain
EXEL -1.3% loss
MTZ .64% gain
Stocks triggering new buys: