SP500 Gasping at New Highs with Cautious Divergences

Jul 24, 2014: 12:15 PM CST

We’re seeing a familiar Hollywood script play out with price chugging to new highs as internals, volume, and momentum run the other way.

While this isn’t a panic signal, let’s at least highlight the extended divergences and “fumes” that continue to accompany a market creeping its way higher.

We’re seeing the S&P 500 Index stair-step its way through all-time highs (top chart) as Breadth ($ADD) and TICK – key Market Internals that reveal what’s going on behind the price – stairstep their way down.

It’s a classic “non-confirmation” or negative divergence between price and Market Internals (and the same is true with volume and momentum oscillators).

Once again, no this does not scream “run and hide and sell everything short” but it should give bulls/buyers a pause before leveraging their account long as they buy the news that stocks are at all-time highs. Continue Reading…

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Breaking Down and Away from the Highs in Electronic Arts EA

Jul 23, 2014: 2:19 PM CST

Electronic Arts (EA) surprised to the upside yesterday on earnings but failed to impress traders with tepid future guidance and we’re seeing a sharp gap-down and sell-off from the recent highs.

Let’s take a look at this strong trending stock, note two prior ‘pullback’ scenarios, and chart the probabilities of what to plan now.

Here’s the daily chart and gap-down against the high:

I first wanted to highlight two similar “divergences into the highs” situations ahead of short-term pullbacks or retracements against the strong uptrend in motion.

We’re charting the odds for a third repeat of this “divergence into resistance” pattern seen from November 2013 and March 2014.

Should history repeat, we could see a pullback or retracement for EA shares in the near future.

Both times, price broke under the rising 50 day EMA which is currently trading at the $35.00 per share level. Continue Reading…

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July 23 Breakout Impulse Update and Stock Scan

Jul 23, 2014: 1:27 PM CST

Once again we ask the question, “How high can this market go?”

Today saw a new all-time intraday ‘breakout’ high for the S&P 500 and we focus our attention – and trading plans – on the breakout level and potential for additional upside continuation via a short-squeeze.

Let’s update our S&P 500 chart from the week and highlight the trending stocks of the day:

For additional planning, be sure to view the broader picture updates from the past sessions:

SP500 Update for a Fibonacci Level Planning Grid

S&P 500 Update and Level Planning July 22

Simply stated, the buyers overtook the sellers and forced a short-squeeze breakout this morning.  We’re trading bullishly above the breakout level as bears lose money to buyers which could fuel a continued breakout towards the simple 2,000 target.

Otherwise, we’ll be on guard for a “Bull Trap” outcome should we see a sudden failure and return under the 1,985 trendline resistance (now potential support/floor) level. Continue Reading…

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Try Out Seven Days of Professional Market Analysis This Week

Jul 22, 2014: 4:32 PM CST

If you’ve ever wanted to know what’s behind the pay-wall (membership site) of Elliott Wave International’s team of analysts and their premium services for multiple markets covered, you have your chance to kick the tires and read all their professional analysis for free for one week starting July 23rd.

I can’t remember when they’ve opened their entire site to the public – email is still required for the trial – and even if you are unfamiliar with their company or method of analysis, you can try it out and see what their analysis suggests about current market opportunities or trends.

As an affiliate, I tend to support their educational outreach instead of their analysis services, but you have an opportunity to see what they’re saying, see how it incorporates into your trading strategies, and decide for yourself whether you would benefit personally from membership into any of their professional analysis services.

Here’s a quick description from the site (where you can learn more information):

“Why are they “opening the doors”?

Previously, Pro Services were reserved mostly for institutional subscribers. Today, everyone can trade the markets only the pros could trade before.

They want you to experience the quality of professional-grade market forecasting. We think you’ll love it.

Join EWI July 23-30 and get intensive Pro Service forecasts for 5 major market categories:

  1. Stocks (U.S., Europe, Asia)
  2. Currencies (11 biggest forex pairs)
  3. Metals (futures: precious and industrial)
  4. Energy (futures: crude, Brent, nat gas and more)
  5. Interest Rates (futures: bonds in U.S., Europe, Asia)

Whatever market you are into, chances are, Pro Services have a forecast for you.”

Again, I am an affiliate of EWI and prefer their educational content which I have found helpful, but I wanted to mention this is a fresh opportunity to take a look at what analysis and market commentary services EWI has to offer to readers who may find it helpful (or at least interesting).

Corey

Continue Reading…

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July 22 Midday Trend Day Update and Trending Stock Scan

Jul 22, 2014: 12:23 PM CST

How high can this market bounce?

Let’s take a look at our new S&P 500 planning chart, highlight the message from Sector Breadth, and conclude with today’s Trending Stock candidates in this afternoon’s intraday update.

Let’s start with our S&P 500 Planning Chart:

Yesterday’s V-Spike Reversal session off the 1,970 midpoint (see yesterday’s update for a Fibonacci Level Planning Grid) took us straight up to the prior high near 1,985.

We’re seeing at least a temporary stall or pullback take place into the resistance created by the prior high which makes planning the rest of the day simple:

Expect a continuation of the breakout and “Short Squeeze” impulse should we see more upside action (“that which is extended can become more over-extended”) but otherwise be cautious/bearish short-term into the resistance of the 1,985 inflection level. Continue Reading…

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