You could take a look at the index to see that it's grinding. Or you could just look at your swing portfolio to detect that conditions are not good.
Going forward though, swing traders need to understand market forces at play. This is how you position a portfolio off of data and not just feel.
Here are a few of the things I use:
* **30Y bond yields**: When yields are pressing higher, it affects equities. Many commentators view 5% as the pain threshold, and I overlaid S&P returns (blue line) on the 30Y chart. It's impactful to varying degrees and in this case, it's over 5% and rising, which is acceptance and acceleration. Same reason every time: high multiple names are priced on earnings that show up years from now. When you can get 5% risk-free, waiting gets expensive.
* **Thematic strength**: I shared themes yesterday that were strong. But zooming out a bit, of the 60 thematic ETF buckets I track, 15 are leading and 30 are lagging (rest are improving or weakening). It just makes swing trading harder when we see more lag than lead.
* **VIX**: We care less about absolute VIX number than regime. When VIX is 14-18, it's calm baseline. When it's 18-22, it's elevated/transitional. When swing trades were super easy in April and May, the VIX was coming down from overheated >22 as conditions eased. But since June, it's flip-flopping back and forth around that 18 divider, which doesn't give much assurance that conditions are eased.
Bad macro conditions don't mean sit out completely, at least not for me. I will still take trades and have several open now that are performing well. However they're nothing near the returns from April/May when doubles were almost easy to find.
There are also plenty of other things like high yield spreads, treasuries/capital flight, breadth, etc that make the market look better than what we're experiencing. Plus, today we're seeing a bounce back in a lot of the tech names that sold off recently. This just adds more complexity to the picture.
https://preview.redd.it/oycxnx4zileh1.png?width=1365&format=png&auto=webp&s=4407d1abae55e8660a7a1a2df63266b825f3401c