Market Nearing Short-Term Oversold Conditions

My Swing Trading Approach

I’m looking to add 1-2 new positions today, but will remain cautious in the early going, which is where the market has been the most vulnerable to sell offs, recently. 


VIX – Highest close since 8/21. Has rallied 7 out of the last 8 days, though each session sees the sellers come in and knock it well off its highs. Closed at 13.13.

T2108 (% of stocks trading below their 40-day moving average): Fell a 8.6% to 41%. That is another huge move. That makes 7 straight days lower, and 20 out of the last 24 trading sessions. Stocks were selling off long before the market made it obvious over the past week. Stocks reached their peak back in early October, which sets this market up for a hard bounce. 

Moving averages (SPX): SPX broke the 20-day moving average. First time we have closed below this MA since 8/28. The 50-day MA is now a possible support level going forward. 

Industries to Watch Today

I would continue to stay away from Energy and Basic Materials. Financials showing signs that it might want to bounce here. Technology stocks looks like they could gain some attention today. 

My Market Sentiment

SPX finished lower for the fourth time in the last five trading sessions, though each sell-off has managed to curb its losses to a large extent. Good chance, we see an attempt at a bounce today. Market nearing short-term oversold conditions. Russell Index is already there. 

S&P 500 Technical Analysis

Current Stock Trading Portfolio Balance

  • 3 long positions
  • Recent Stock Trade Notables:

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    Author: Travis Esquivel

    Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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