May 30 Weak Trending Intraday and Stock Scan Update

May 30, 2014: 1:10 PM CST

What has the market done, what levels are our current focal points, and which stocks made the list of top trenders for May 30th?

Let’s jump straight into our mid-day update to find out:

After  yesterday’s breakout beyond 1,915 (note the short-squeeze and bullish breadth commentary yesterday), we saw a rally extend just above the 1,920 target to peak with clear negative divergences into the mid-day high (so far).

Our focal points for today include the 1,917 index level which held support – failure (a breakdown) here targets the 1,915 level again.

Otherwise, we do note the sideways action and slightly higher odds for a breakdown than sustained rally (yet stranger things have certainly happened in terms of bullish continuation of the trend).

A breakthrough above the 1,919 EMA and price level strongly favors a ‘short squeeze’ break back to the highs.

Sector Breadth – unlike yesterday – paints a much more BEARISH picture today:

This time, Sector Strength is clearly concentrated in the Defensive/Risk-Off Sectors of Staples and Utilities (where 90% of Utilities stocks are positive at the moment).

Relative Weakness appears in Technology, Materials, and Industrials and – to an extent – Energy and Health Care.

Moving on – here are our top uptrending stock candidates from our pro-trend day scan today:

Target (TGT), NPS Pharma (NPSP), defensive Colgate-Palmolive (CL), and Lorillard (LO).

Potential downtrend continuity candidates include the following:

Marketo Inc (MKTO), popular stock Twitter (TWTR), Lions Gate Films (LGF), and Guidewire Software (GWRE).

Be cautious going into this great weekend.

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Corey Rosenbloom, CMT
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