A cynic would ask “When does this rally end?” A trader… couldn’t care less.
Buyers saved the market from another sell-off, short-squeezing the market to a fresh new tradable high.
Let’s dive inside action and note key levels and the trending stocks of the bullish day:
Continue to reference the “S&P 500 Range Planning” post for a broader perspective.
While price continues to push gently to new highs, the underlying internals and momentum just aren’t keeping up.
No, a negative divergence into resistance does not mean the price is required to reverse lower, only that the probabilities suggest that it will do so.
We’ll thus be bearish should price turn and reverse sharply down away from the 2,120 upside target.
However, we’re traders and don’t care about they whys or reasons or price movements, and thus will continue trading long to capture intraday or short-term trading profits from on ongoing bullish move and short-squeeze (financial losses from the logical – yet incorrect so far – bears).
Let’s see what our Breadth Chart reveals about current market strength (or weakness):
There’s a slight mixed message today with sector strength coming from Offensive sectors Financials, Discretionary, and Materials yet this strength is counterbalanced by the top sector today – Utilities (a defensive sector).
Money flow paints a picture of bull/bear struggle at the highs with neither side emerging victorious now.
We have potential bullish trend continuation plays in the following stocks from our scan:
Amazon (AMZN), Microsoft (MSFT), Ball Corp (BLL), and Newmont Mining (NEM)
If you’re must be a bear on a bullish day, you can try these bearish/weak names:
Herbalife (HLF), Boeing (BA), 3D Systems (DDD), and CommScope (COMM)
Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade