Bullish Reversal Stock Scan and Market Update for September 16

Sep 16, 2014: 1:02 PM CST

And now for something a little different!

Today’s session sported a strong Bullish Reversal in the S&P 500 from a “Rounded Reversal” and bullish divergence pattern.

Let’s update our chart and note the key trending stocks of the day.

I highlighted the positive market internal divergences to members last night (and in this morning’s briefing with TradeStation) and indeed, the market responded with a larger-than-expected bullish reversal.

Price achieved the minimum targets and actually traded rapidly above the 1,997 prior high and then the 2,000 “round number” index level.

The market is caught in a “short-squeeze” or positive feedback loop of bullish action and may continue in this direction as long as the index remains above the focal point 2,000 (where bears will trigger stop-losses at higher levels). Continue Reading…

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Hidden Support Areas Revealed from Moving Average Clusters

Sep 15, 2014: 3:44 PM CST

When using moving averages on a chart to find possible targets and support levels, which exact moving average setting should you use?

How about more than one?

The “Moving Average Cluster” charts help answer this question by finding overlapping price levels where more than one moving average meets.

Let’s see these charts of hidden support levels revealed on the US Equity Indexes:

These charts use color-coded moving averages of similar values to highlight very short-term (blue), intermediate (around the 50 day SMA) term which is green, and finally a longer term like the 200 day SMA (red).

We’re looking for areas of crossovers or overlap to pinpoint ‘hidden’ levels that aren’t evident by viewing a single moving average setting as we would on a normal chart.

Quickly, we see that the current overlap occurs at the 1,974 level for the S&P 500 which is where we’ll keep our focus on any additional pullback.

Notice also how price (the blue averages) has a recent pattern of breaking under the intermediate averages (green) before continuing the rally. Continue Reading…

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September 15 Stock Scan and Market Update

Sep 15, 2014: 1:05 PM CST

We’re still charting the key levels on the S&P 500 along with trending stocks of the day.

Let’s start today’s update with the Breadth Signal Chart and then Pinpoint Trending Stocks of the Day:

With today’s slight sell-session moving forward, we see the logical picture in Breadth.

Strength (for now) is concentrated in the Utilities sector along with Staples and Energy while the traditionally offensive/bullish sectors (like Financials, Discretionary, and Technology) are the weakest performers of the day (along with Health Care).

While not perfect, it is a confirmation of the bearish or defensive money flow of the session. Continue Reading…

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September Scanning for Overextended Stocks

Sep 15, 2014: 11:40 AM CST

What are the top five most over-extended (bullish uptrending) stocks and which are the top five under-extended (bearish downtrending) stocks in the S&P 500 right now?

Let’s update our scans and see what they are and how we may trade them.

We’re defining “over-extended” as being the highest percentage “extended” above the rising 200 day Simple Moving Average (SMA) and we scanned all stocks in the S&P 500 (using FinViz.com).

At the moment, Southwest Airlines (LUV) is the most “over-extended” stock as we can see from the chart below:

Not only is it an over-extended stock, it’s a strong-trender according to our principle “Strong Getting Stronger.” Continue Reading…

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Quick Charting New September Trends in Cross Market Money Flow

Sep 12, 2014: 1:41 PM CST

Even if you are only a stock market trader, it’s important to view money flow moving across major markets.

Let’s take a quick update of our “Cross-Market Money Flow” trends as we move into the middle of September.

We’re seeing the futures contracts of the S&P 500, Gold, Crude Oil, and US Dollar Index.

From the top-level, we see money flowing INTO Stocks and the US Dollar Index and OUT OF leading commodities Crude Oil and Gold.

That’s simple, but we saw a slight retracement up for commodities at the end of August, only to see these new intraday downtrends continue. Continue Reading…

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