Nov 4 Retracement Market Update and Trending Stock Scan

Nov 4, 2014: 1:46 PM CST

Unlike yesterday, stocks took a pause and retraced lower during today’s session.

Note the earlier morning update on “The Message from Market Internals” that helped forecast this pullback.

Sellers stopped out and buyers entered, helping to propel price higher in a breakout event.

Here’s our updated levels as the S&P retraces from its inflated all-time high:

Price nipped above the 2,020 level on multiple negative divergences and traded lower into yesterday’s close.

The logical and expected selling pressure (suggested by lengthy divergences) carried over into today’s session with a reversal all the way back to the 2,000 simple support target.

A bounce/rally occurred off this level and we’re monitoring price for additional downside action back toward 2,000 or lower against the buy signal and short-squeeze that would trigger above 2,011.

Breadth is – as they say – “All over the place” today:

Where do we start?!

Our weakest sectors – surprisingly – are the Energy and Utilities Sectors while the top performer during today’s session is logically the Consumer Staples Defensive Sector.

However, we see pockets of relative strength in Financials, Technology, and Industrials.

Just like most traders it seems, the market hasn’t quite made up its mind yet as to which direction to travel.

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

Delta Airlines (DAL), Costco (COST), ICE Exchange (ICE), and O’Reilly Auto (ORLY).

Potential downtrending candidates exist in stocks showing relative weakness today:

Viacom (VIAB), CBS, Michael Kors (KORS), and Priceline (PCLN).

Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

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