Surprisingly, the weak new price highs continued with another stab at the upper level again today, though bears were there to halt the market into resistance again.
The negative divergences still flash a big caution sign as price initially moves down away from this target.
We’ll update our key levels, highlight the divergence, and of course note trending stocks today:
After the breakout above 2,060’s rectangle resistance target, a powerful short-squeeze logically took the market to new highs into 2,100.
Today’s session saw potentially one more last-gasp rally at the new highs ahead of a reversal, but until we see price under 2,090 we’ll simply have to be cautious bulls and morph into aggressive bulls on a clean breakout higher above 2,105 or higher.
Right now, focus on the 2,095 to 2,105 simple range reference pivot points for planning trades.
Let’s see what our Breadth Chart reveals about current market strength (or weakness):
Unlike yesterday’s Bearish Sector Breadth, today’s session flashes a big bullish signal.
The strongest performance appears in the Offensive/Bullish Sectors like Discretionary and Technology while the weakest sectors today are the defensive names of Staples, Health Care, and Utilities.
If anything, this should give us pause and prepare plans to play a possible bullish breakout higher if it occurs.
We have potential bullish trend continuation plays in the following stocks from our scan:
Priceline (PCLN), Expedia (EXPE), Trinity (TRN), TripAdvisor (TRIP)
Potential downtrending candidates exist in stocks showing relative weakness today:
Lasalle (LHO), Host Hotels (HST), Wal-Mart (WMT), and ProLogis (PLD)
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade