May 12 Breakout Trend Day Trading Update

May 12, 2014: 1:05 PM CST

Price tends to impulse or power-rally stronger when it traps traders or otherwise defies conventional wisdom.

That’s part of the reason price is surging higher today, so let’s take a moment to update our Mid-Day charts and highlight potential trend day stock trading candidates.

We’ll start with an intraday picture of the S&P 500 Structure:

On the intraday chart, price continues to sport an uptrend (higher highs and higher lows) and we see another rising parallel trendline structure.

The breakout above 1,890 triggered more buy (to enter) orders along with buy (to cover/limit losses) orders from the short-sellers/bears.  It’s this type of “feedback loop” or one-sided domination that propels price through breakouts.

Look to be cautious on a re-break under 1,890 and otherwise continue playing with the bulls/buyers no matter how strange that may feel (buying a breakout market targeting 1,900 or above).

Our Sector Breadth Chart shows continued bullish capital inflow:

The chart above is the picture of absolute bullish dominance.  All S&P 500 Material Sector stocks are positive while almost none (13%) of the Utilities Sector stocks are positive.

Bullish Breadth dominates with all sectors – except defensive Consumer Staples – showing Breadth readings at the 90% positive level.

As a slight cautionary or big-picture backdrop, take a look at my prior post “Clear Warning Sign from Consumer Staples/Discretionary Relative Strength Charts.”

With all this money flooding into the market today, take a look at our top uptrending candidates:

TripAdvisor (TRIP), Tyco (TYC returns to the list), Joy Global (JOY), and Corning (GLW).

Instead of selecting the top four downtrending stocks, I present this table for you:

If you’re looking to fight the clear trend of money flow into the market, any of these names could be candidates (they’re relative strength ‘losers’ today).

Also, I wanted to display the whole table which highlights just how severely sellers are punishing Utility Sector names – of the top 27 stocks from our Relative Strength (in this case, Relative Weakness) scan, all but three are from the Utilities Sector.

That fact alone is worth additional consideration or study.

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Corey Rosenbloom, CMT
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2 Responses to “May 12 Breakout Trend Day Trading Update”

  1. May 13 Breakout Intraday Update and Stock Scan | Afraid to Blog Says:

    […] With yesterday’s bullish breakthrough above 1,889, we saw logical upside continuation (short-squeeze) as mentioned in yesterday’s update. […]

  2. Breakout Intraday Update Says:

    […] With yesterday’s bullish breakthrough above 1,889, we saw logical upside continuation (short-squeeze) as mentioned in yesterday’s update. […]