Dec 31 Quick Market Update and Stock Scan

Dec 31, 2014: 2:10 PM CST

So far, stocks are taking a breather (retracing) to end 2014 with two final days of selling pressure.

Still, the S&P 500 will be up around 13% for the year – an impressive gain for a single year.

For our last mid-day update post of 2014, let’s focus on what the market is saying and what levels are important as we end a stellar year.

The “Santa Claus” or end-of-year historical rally appeared right on schedule, inflating the S&P 500 from the 1,980 level to the prior high just shy of the 2,100 target.

We’re seeing natural, normal, expected, highly probable selling (retracement) taking place from these levels as suggested by a lengthy negative dual divergence (into resistance) in momentum and Market Internals.

Follow the retracement lower but beware that volatility can be high – and volume relatively low – as a year comes to a close.

Funds and investors balance portfolios and make adjustments that don’t necessarily translate into neat price patterns as would be the case in normal environments (not holiday periods).

What is Sector Breadth revealing about today’s session? Let’s discover together:

Relative Strength on today’s sell-session comes from the Consumer Discretionary and Health Care sectors.

Weakness appears in Financials, Staples, and somewhat surprisingly Utilities.

We have potential bullish trend continuation plays in the following stocks:

Chimerix (CMRX), Toll Brothers (TOL), Ryland (RYL), and D.R. Horton (DHI).

Potential downtrending candidates exist in stocks showing relative weakness today:

Kellogg (K), NRG Energy, General Mills (GIS), and Mondelez International (MDLZ).

Have a wonderful New Years and here’s to a thrilling and exciting 2015!

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Corey Rosenbloom, CMT
Afraid to Trade.com

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