Can The Market Break The Highs? -

Can The Market Break The Highs?

Aug 21, 2018Jeremy ParkinsonFinance0

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