Stocks Are In Overbought Territory

My Swing Trading Approach

I’m not opposed to adding a new position in this rally, but stocks are in overbought territory and may see some profit-taking. I’m taking a “wait-and-see” to this market. 

Indicators

  • VIX – Dropping hard over the last four days, and closing at its lowest level since 2/1. 
  • T2108 (% of stocks trading below their 40-day moving average): Solid 10% move yesterday, and massive move over the last two trading sessions. Now at 40%, much improved, but with indices making a move towards their all-time highs again, it is not keeping up with the current market bounce. 
  • Moving averages (SPX): Downside cross of the 20/50-day moving average, yet price is now trading above all major moving averages. The MA picture is extremely messy at the moment. Expect that to clear up in the coming days. 
  • Industries to Watch Today

    Technology continues to lead the way higher and now trading right at its all-time highs. Utilities were the only sector to trade lower yesterday, suggesting traders are becoming less defensive. Most sectors established higher-highs yesterday off of the February lows. 

    My Market Sentiment

    Higher-high and higher-low firmly in place following yesterday’s rally. Strong chance we see a retest of the all-time highs in the near-term.

    S&P 500 Technical Analysis

    Current Stock Trading Portfolio Balance

  • 5 Long positions
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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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