Breakdown Stock Scan and Trend Day Market Update May 26

May 26, 2015: 1:12 PM CST

We’re finally seeing some action in the market after a flat, range-bound, divergent, false breakout event last week.

Take a look at this morning’s post on the expected breakdown event.

Let’s take a look at the current picture and plan the next step:

Today’s session officially springs a Bull Trap which (hopefully) didn’t come as a surprise.

Odds were much higher for a reversal scenario like we’re seeing as opposed to the market being held-up at the highs with duct tape as negative divergences extended.

The movement away from 2,130 set in motion today’s fall toward the 2,100 simple target we’ve been discussing.

At this point, the market has achieved a key downside target (2,100) on intraday positive divergences so we’ll be on guard for a bounce up off 2,100.

Otherwise, we’ll continue a short-term campaign of short-selling the market as it trades down away from 2,100.

Let’s see what our Breadth Chart reveals about current market strength (or weakness):

Save this chart for the record books!

ZERO Dow Jones stocks are positive right now and only 5% of S&P 500 stocks are positive.

Most sectors hover under 4% Breadth levels except Health Care which is today’s “Leader” (if you call 10% Sector Breadth Leadership).

Days like this should keep you on the short/bearish side of the market – go with the tide of money flow (not against it).

Are you a renegade?  Here’s four up-trending stocks bucking today’s tide of selling pressure:

Time Warner (TWC), T-Mobile (TMUS), AbbVie (ABBV), and Veeva Systems (VEEV)

Bearish downtrending candidates include the following stocks from our “weakness” scan:

Tata Motors (TTM), Harley-Davidson (HOG), Astrazeneca (AZN), and Sanofi Aventis (SNY)

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Corey Rosenbloom, CMT
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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

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One Response to “Breakdown Stock Scan and Trend Day Market Update May 26”

  1. A Quick Lesson in Trading Reversals from Support with Divergences | Afraid to Blog Says:

    […] looking at today’s lesson, be sure to view yesterday’s “Breakdown S&P 500 Market Update and Trending Stock Scan” (which I write each […]