Markets are never boring! That’s for sure.
What started as a strong, bullish session has now reversed – from negative divergences – to a Rounded Reversal.
Let’s update our key levels, highlight the divergence, and of course note trending stocks today:
On the Unemployment Report, stocks started the session trending higher on a short-squeeze but ended the rally just above the 2,070 level on a lengthy negative Market Internal Divergence.
The afternoon shatter of the 2,070 level set in motion a sell swing and reversal down to create (so far) a Rounded Reversal pattern all the way under the opening price.
The short-term level to watch is 2,060/2,055 which puts us back in the consolidation level of yesterday’s session.
Let’s see what our Breadth Chart reveals about current market strength (or weakness):
Breadth rapidly turned negative on the reversal, shifting from a positive stance to the current negative one.
Only one sector – Financials – is positive today (above the 50% Breadth level) and all others are underwater.
The Utilities Sector has no stocks at all trading positive today – which is strange on a bearish session.
We have potential bullish trend continuation plays in the following stocks from our scan:
If the market holds support, look to play strength in Verisign (VRSN), Linked-In (LNKD), FLIR, and BWLD.
Potential downtrending candidates exist in stocks showing relative weakness today:
YELP, Brixmor Property (BRX), TripAdvisor (TRIP), and Scana Corp (SCG)
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