Focusing on Just the Rallies – an Interesting Pattern Emerges

Jul 18, 2014: 1:14 PM CST

What does price reveal if we focus on “just” the recent rallies?  A stealth bullish repeating pattern emerges that demands our attention.

Let’s focus just on the spike-rally impulse phases in the S&P 500 recently:

I’ve purposely eliminated the sell-swings from mid-June to present on the S&P 500 30 min chart.

We can thus compare ONLY the rally swings (impulses) and focus our attention on something compelling.

Notice that each green highlight represents a strong intervention force of buying pressure at the start (or in the case of July 1st and 14th – in the middle) of a non-stop bullish impulse. Continue Reading…

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July 18 Bounce Level Planning and Intraday Update

Jul 18, 2014: 12:46 PM CST

It’s as if yesterday never happened – buyers intervened and tripped the market higher as bears covered losses during the rally.

Let’s put today’s price action in the context of the broader trading range (highlighted in yesterday morning’s update post on the S&P 500 and Dow Jones rising trendline levels to watch) and note which levels are important for trade planning now.

After a false breakdown (Bear Trap) under the 1,960 level, buyers intervened at the 1,955 level which resulted in part in today’s bullish rally up off the trendline support in a stronger move than we saw from the July 10th intervention (similar scenario).

The index now interacts at the pattern midpoint near 1,971 which is our focal point for the remainder of the trading day.

Any further support-up off this level suggests 1,983 is back in play while a break under 1,970 opens a sell pathway again like July 10th. Continue Reading…

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July 17 Midday Intraday Update and Daily Stock Scan

Jul 17, 2014: 12:59 PM CST

With the geopolitical news affecting markets, traders seem to be adopting a “Sell First, Ask Questions Later” mentality and that’s perfectly logical.

Let’s update our intraday levels and highlight which stock names are potential trend day candidates.

Start with this morning’s update post on the S&P 500 and Dow Jones rising trendline levels to watch – this will highlight our key levels and targets on any movement away from current pivots.

After that, let’s focus on our Sector Breadth Chart and the message for the day:

We’re seeing a mixed message from Breadth, namely in the form of split relative strength (leadership) in the Risk-ON sectors such as Discretionary, Technology, and Materials but also the Risk-OFF sectors of Staples, Utilities, and especially Health Care.

Move with caution in today’s session – that’s the message from Sector Breadth today. Continue Reading…

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Quick Updating SP500 and Dow Jones Trendlines and Targets

Jul 17, 2014: 12:23 PM CST

What quick-reference levels should we be watching on the S&P 500 and the Dow Jones Industrial Average and why are the trendline patterns different?

Let’s start with the S&P 500’s rising wedge pattern:

There’s certainly more than one way to draw similar trendlines, but the pattern above shows a compressing or potential “Rising Wedge” pattern developing in the S&P 500.

Our key focal points are the easy-to-remember 1,970 (today’s spike-reversal low) and 1,982 which has developed as a short-term resistance/reversal level.

Note the negative divergences that undercut the early July and present rallies into the 1,980 level.

We’ll be neutral between these two levels and otherwise breakdown bearish on a clean impulse under the 1,970 region. Continue Reading…

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July 16 Stock Scan and Intraday Trading Update

Jul 16, 2014: 12:05 PM CST

The bull trend continues higher today but what levels are important and which stocks are possible trend day candidates?

Let’s start with our Intraday S&P 500 Chart and follow-up with our  list of trending stocks:

A simple S&P 500 price level planning chart shows that the 1,976.50 pivot is our key focus for intraday support.

Our other focal level is the prior high just above 1,980 and this morning’s high into  1,984.

A clean breakthrough above the morning high suggests that buyers will trigger a short-squeeze to propel the index into the all-time intraday high of 1,985.50 (July 3).

Technically we’ll look to be neutral within today’s range; bearish under 1,976.50; and otherwise breakout bullish on a clean impulse above the morning high. Continue Reading…

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