Oct 7 Key Intraday Update and Focused Stock Scan

Oct 7, 2015: 12:51 PM CST

A Bull Trap triggered as price broke out, stalled into the 2,000 target, and reversed this morning.

However, we’re starting to see additional strength mid-day.  What’s going on and what are we watching?

Let’s update our levels for the S&P 500 Index:

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Here’s a quote from last night’s member strategy planning report:

Don’t be a hero here – play within this trading range as highlighted and look to be long/bullishly IF buyers step in and trigger ANOTHER short-squeeze above 1,980 toward 2,000.”

Strangely enough, that’s precisely what happened.  Price broke the 1,980 level and burst instantly toward the 2,000 target before stalling with clear negative divergences and returning back to the breakout (1,980) from which it came.

Caution was the correct strategy for today but let’s continue focusing on this range and the potential afternoon strength we’re seeing above 1,980.

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

Perhaps surprisingly, all sectors (except Utilities – a defensive name) are strong today and above the 50% Breadth Line (where more than 50% of the stocks in the sector are positive).

Our twin sectors of strength today are Materials and Industrials, building on strength from yesterday.

Our strongest performer yesterday – Energy – is showing a muted performance today.

The broader picture painted by Sector Performance is that of bullish strength and money flow today.

Here’s a top-level or full-perspective view of today’s S&P 500 stock performance (courtesy of FinViz.com).

Here are today’s strongest trending (intraday) names – candidates for pro-trend continuation:

Rio Tinto (RIO), Scripps (SNI), Global Payments (GPN), and Tata Motors (TTM)

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

YUM! Brands, Adobe Systems (ADBE), NU Skin (NUS), and Herbalife (HLF)

Corey Rosenbloom, CMT
Afraid to Trade.com

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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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