Weekend Review January 04, 2019

Swing trading often involves looking for windows of opportunity before the door slams shut.  The market may be opening a door as the major indices have had a two week rebound of ~8% from their December low.  In the near term there are two scenarios that I find plausible, one being a retest of December lows and the other being a period of consolidation.

QQQ Scenarios

Scenario A will become clearer should selling begin again.  Scenario B may be a little more nuanced with the indices having wild swings up and down while the underlying buying to selling will be asymmetrical in nature.  What I mean by this is that a stock like AAPL may lead the indices to the downside but the upside is the result of a larger basket.

VIX

Of note this week: Volatility as gauged by the VIX is falling.

Highs to Lows

Highs to Lows across a 1M and 3M time frame is positive.

Trading Universe

If the market does continue to improve and commence a new momentum phase, the universe I trade should expand.  As of now this is still anemic.  This week focus will be on a couple of core concepts: improvement in these numbers,  increase in setups, and stocks over my holding period showing price appreciation.