With the morning sell-off and current bounce off a key Fibonacci Level, what price targets are important for our trading decisions for the rest of the day and which stocks are leading candidates for potential trend day continuation?
Let’s start with our S&P 500 Level and Fibonacci Retracement Chart:
Friday’s big rally up off the 1,960 level led to a failure with divergences into the 1,980 region.
The failure set the stage for this morning’s sell-swing down to the 38.2% upward retracement as drawn (1,966) and price is trading within the boundaries of the Fibonacci Grid (1,973; 1,970; and 1,966).
Note the Fibonacci Grid and incorporate it into your trading decisions.
We would expect a break above 1,973 to continue the uptrend back toward the 1,980 level again while a breakdown under 1,965 opens a fast sell pathway toward 1,960 or lower.
Also like Friday, Sector Breadth paints a mixed picture:
Our strongest sectors are Technology and Industrials which would normally be bullish, but sector strength stealthily appears in defensive Health Care and Utilities.
Financials sends a bearish picture with their relative weakness while at the same time Staples sends a bullish picture with its weakness.
Follow price action with respect to the range (since Breadth once again is confusing the picture for the day).
Now, let’s shift our attention to bullish-trending stocks for potential buy-trades the rest of the day:
Facebook (FB), Juniper (JNPR), Allergan (AGN), and EMC.
Bearish potential trend day continuity stocks include the following candidates:
Hasbro (HAS), Valero Energy (VLO), Equifax (EFX), and Mattel (MAT).
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