May 20 Melt Up Market Update and Big Bullish Stock Scan

May 20, 2015: 1:36 PM CST

The market was at risk for a “Melt Up” or “Collapse Higher” today and heated up toward a Melt Up Breakout.

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

Here’s a snippet from Friday evening’s Premium Member Strategy Report that forecast today’s rally:

Thus we’ll officially label our DOMINANT thesis as the breakdown/retracement move to short the market (intraday) on a movement down under 2,130.

That’s not enough.

IF the buyers collude and flood liquidity into the market, forcing a short-squeeze, then you can be assured that price will impulse higher as part of our ALTERNATE thesis which calls for a LARGER than expected move in the opposite direction

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Buyers simply refuse to let the market fall under its own weight and thus BEARS and short-sellers are the ones helping boost the market higher when their collective – unexpected – stop-losses are triggered at higher levels.

After the Fed Minutes, price impulsed to new highs (just after this chart was taken) and that was precisely what was expected as part of our alternate/surprise thesis explained in more detail last night.

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

The strongest sector at the moment is Utilities, followed by Health Care and Energy, which form the more defensive grouping of sectors.

All other sectors hover – at this moment – near the 50% Breadth line while roughly 50% to 55% of stocks in the S&P 500 and Dow Jones are positive as of this mid-day screen cap.

With the bullish impulse and alternate thesis short-squeeze, it would appear the market is once again buy, buy, buy as a “larger than expected” move materializes as traders – some of them at least – are thrown off guard by more money flooding into the market at the highs.

You’d want to trade stocks showing relative strength, like our top stocks today:

Sarepta (SRPT), Cablevision (CVC), UBS, and Time Warner Cable (TWC)

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

Southwest Airlines (LUV), United Continental (UAL), Lowe’s (LOW), and Best Buy (BBY)

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Corey Rosenbloom, CMT
Afraid to Trade.com

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2 Comments

2 Responses to “May 20 Melt Up Market Update and Big Bullish Stock Scan”

  1. Textbook Arc Rounded Reversal for High Flying Airlines | Afraid to Trade.com Blog Says:

    […] These two stocks – and their Gap into Trend Day events – topped our list of weakest intraday stocks on May 20th. […]

  2. Southwest Airlines Co, United Continental Holdings Inc: Textbook Arc Rounded Reversal For High Flying Airlines | ZombieMarkets Says:

    […] These two stocks – and their Gap into Trend Day events - topped our list of weakest intraday stocks on May 20th. […]