May 23 Trend Day into Resistance SP500 Intraday Update

May 23, 2014: 1:08 PM CST

We’re seeing a repeat of yesterday’s strong trend day up, but this time the index scrapes against the 1,900 easy-reference resistance level.

We’ll start today’s mid-day update with a discussion about the 1,900 level:

Be sure to reference yesterday’s update – if only for the benefit of learning what happened next – and apply that same logic to today’s near-identical uptrending/breakout session.

The key reference is level is the obvious one:  1,900.

A clean, impulsive breakout higher starts to trigger a large amount of stop-losses from the bears/short-sellers (with tight stop losses) which could instantly propel price higher.

Otherwise, the favored expectation is for a stall (consolidation) or even downward movement against the 1,900 simple target.

It may be best to avoid shorting this market unless we see it break firmly under 1,898 first.

Sector Breadth confirms the Bullish Action today:

The classic “Risk-On” or offensive sectors (except Financials) are showing today’s Relative Strength leadership.

Energy along with the Defensive names once again show today’s relative weakness.

The following stocks may offer the best trend day continuity opportunities:

Delphi Automotive (DLPH), Lions Gate Films (LGF), UPS, and Cognizant Technology (CTSH).

For bold, brave, trend-fighting bears, look to the following candidates:

Comstock Resources (CRK), Edwards Lifesciences (EW – back for a second day in a row), AFLAC (AFL), and Murphy Oil (MUR).

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Corey Rosenbloom, CMT
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