April 24 Range Sector Breadth and Intraday Trading Update

Apr 24, 2014: 12:31 PM CST

We’re seeing a bullish but consolidating session after yesterday’s bearish range session.

Let’s update our mid-day charts, note the message from Sector Breadth, and highlight the trending stock candidates of the day.

A quick glance at our S&P 500 intraday chart shows another range day – a bullish range day but nonetheless another compression day around the 1,880 index level.

Note the up-gap and reversal with TICK and Momentum Divergences off the 1,872 level which was met by a similar reversal down against the 1,882 high with the same style of negative dual divergences.

Right now, we’re monitoring compression action around the 1,880 or 1,881 area.

A clean breakthrough above 1,883 triggers stop-losses and breakout-buy orders for a bullish bias, otherwise we remain neutral/cautious between the 1,879 and 1,882 levels.

Bearish pathways (set-ups) open under the 1,879 level.

Our sector breadth – while bullish – does indicate caution again:

While Sector Breadth is positive across the board (all Sectors except Materials are showing readings above 50%), the strength once again is concentrated in Utilities ($XLU) and Energy ($XLE) which has been a stealth caution pattern.

This time we’re seeing retail or Consumer Discretionary stocks at the same levels as Energy and Utilities but all other sectors miss the 60% mark (meaning 60% of stocks in the sector are positive on the session).

With a Range or Neutral Bias, we still have strong gapping stocks including leader Apple (AAPL):

Stocks that could continue on the bullish intraday pathway (trade retracements) include Apple (AAPL), Aetna (AET), Zimmer Holdings (ZMH), and Diamond Offshore Drilling (DO).

Because today is not a bull-dominated session (so far), we can look at bearish trend day candidates:

There are stocks gapping strongly down and those showing strong intraday bearish trends – these include hard to pronounce Xilinx (XLNX), Hersheys (HSY), Flowserve Corp (FLS), and Helmerich & Payne (HP – not to be confused with Hewlett-Packard).

Continue watching the key S&P 500 intraday levels for any breakout from the range (reference yesterday’s triangle update).

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Corey Rosenbloom, CMT
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