April 7 Collapsing Sector Breadth and Intraday Trending Stocks Scan

Apr 7, 2014: 12:18 PM CST

At the halfway point of an extended sell-off in the Stock Market, what message does our “Sector Breadth” chart send and which stocks may be intraday “trend day” trading candidates?

Here’s our April 7th sell-off intraday update:

Just like Friday’s “Market Collapse” update where Sector Breadth was clearly negative, today’s session shows similar “collapse” parameters.

First, almost all S&P 500 Consumer Discretionary ($XLY), Materials ($XLB), and Industrials ($XLI) stocks are positive mid-day.  Roughly 20% of Financial ($XLF) and Technology ($XLK) stocks are positive at this moment while 10% of Energy ($XLE) stocks are up.

Contrast this with 73% of Consumer Staples “Risk-Off” ($XLP) and 65% of Utilities ($XLU) stocks are positive at mid-day.

This would be a clear picture of “Risk-off” bearish/defensive money flow in a broader scope as money flows out of US Equities at the moment.

We’ll start first with four potential “trend day” sell-off stock candidates (and there are many):

Our scan includes the ADT Group (ADT), Lincoln National Corp (LNC), the CME Group (CME), and Time Warner Cable (TWX).

For those brave enough to fight money flow in the braoder market, here are potential uptrending “trend fighters”

Pepco Holdings (POM), Coca-Cola Co (KO), Health Care Reit (HCN), and HCP Inc (HCP).  With the exception of Coca-Cola, most traders probably have never heard of the other top uptrending candiates.

Interestingly enough, Pepco Holdings is a Utility Company while Health Care REIT (HCN) and HCP are both real estate investment trusts (REITs), both of which invest in health care real estate.

Continue monitoring the remainder of the session for any sign of reversal and barring that, continue shorting weak stock candidates.

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Corey Rosenbloom, CMT
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Corey’s new 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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April 4th Reversal Day Breadth and Trending Stocks

Apr 4, 2014: 12:34 PM CST

What a day this has been so far!  Let’s get right to our intraday Sector Breadth update and trend day trading candidates (hint – there’s far more bearish stocks trending down today than those trending up).

Here’s our SP500 Breadth Chart:

A quick glance shows a huge spike (bullish money flow) into “Risk-Off” or Defensive Utilities (along with some flow into Energy and Staples).

However, across the board, money is clearly flowing out of the Stock Market in today’s session.  Short-sellers may want to concentrate their attention on the weakest sector, Technology ($XLK) and perhaps Consumer Discretionary ($XLY).

Beyond the broader picture of Sector Strength/Weakness, here are our top uptrending candidates:

I would consider staying away from the long side as long as the broader US Equity Market trends lower.  There’s no point in trying to find the diamond in the rough (finding the few stocks fighting the trend) when the tide of money flow is so strong.

But if you must fight a trend, consider PG&E (PCG), Public Service Enterprises (PEG), AES Corp (AES) and perhaps Best Buy (BBY) which is a rare gem of consumer discretionary strength on a broad sell-off day.

Otherwise, here are our strongest downtrending candidates (and the scan revealed far more than four):

Kansas City Southern (KSU), Allegion (ALLE), Charles Schwab (SCHW – which is interesting), and Occidental Petroleum (OXY).

With a bull trap sprung, bears have their opportunity to wreck havoc today (and they already have).

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Corey Rosenbloom, CMT
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Corey’s new 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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Join Me Live Thursday for a Webinar on Overcoming Fear in Trading

Apr 2, 2014: 7:05 PM CST

I’m looking forward to a special webinar with Trader Kingdom that will take place Thursday, April 3rd at 4:30pm EST / 3:30pm CST and I hope you can join us!

Trader Kingdom Overcoming Fear Webinar

The webinar is entitled “Specific Strategies to Conquer Fear in your Trading” and here is the official description from the website (which includes free registration link):

Many traders often swing like a pendulum from greed and overconfidence to fear and hesitation depending on their experiences.

Join Corey Rosenbloom, CMT as he shares his experiences and discusses specific strategies designed to help you:

  • Build confidence
  • Overcome fear
  • Reduce doubt in your trading decisions

You will learn incremental steps you can apply now to combat normal fears and anxieties that occur as traders. The webinar will be particularly useful if you find yourself paralyzed by fears and unable to execute trades.

I hope you can join us live where you’ll be able to ask questions and participate with us!

Thanks to everyone at Trader Kingdom for making this event possible.

Corey

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Quick Charting April Market Internals at the Highs

Apr 2, 2014: 2:19 PM CST

While the S&P 500 is breaking again to all-time highs in today’s session, let’s peek behind the price and take a look at the message from the “Big Three” Market Internals.

To start, it’s a message of current caution:

SPX Big Three Market Internals TICK VOLD Breadth

The straight-up march from the 1,840 support level (see my prior post “Key Inflection Support Planning for SP500“) has been undercut by a steady decline (in indicator highs) in our “Big Three” Market Internals.

Broad NYSE Breadth registered its kick-off/strength high on March 28th at the start of the rally (1,925) and has steadily declined from that peak.

Similarly, NYSE intraday TICK registered its high on the gap-up on March 31st and – despite an end-of-day spike yesterday – has also trailed lower.

VOLD or Volume Difference of Breadth (Advancers minus Decliners) also has trailed the market during its advancing phase.

This is a quick update but it does draw our attention.  We’re always on guard for “Bull Trap” situations as risks to trading any breakout opportunity.

Continue monitoring internals as price hovers in “all time high” territory.

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Corey Rosenbloom, CMT
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Corey’s new 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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April 2 Midday Stock Market Breadth and Trend Update

Apr 2, 2014: 1:02 PM CST

With the trading day more than halfway complete, let’s take a look at the top intraday trending stock candidates along with our intraday Sector Breadth grid to set the stage for the remainder of the session.

We’ll start with our Sector Breadth Grid:

Sector Breadth

We use intraday Sector Breadth both to get a sense of the broader “Risk-On/Risk-Off” Money Flow into the stock market and also to determine where to concentrate our interest on leading sectors (stocks within them).

The broader picture shows “Risk-On” flow as evidenced by strength in the Consumer Discretionary ($XLY), Materials ($XLB), and Industrials ($XLI) Sectors and relative weakness in Health Care ($XLV) and Utilities ($XLU) but also in Technology ($XLK) which is a Risk-On Sector.

Today’s session resulted in another breakout to new highs and an extension (so far) of the short-squeeze rally at new highs.

While there are many bullishly trending stocks, our scan revealed these top candidates:

Urban Outfitters (URBN), Staples (SPLS), Caterpillar (CAT), and Time Warner Cable (TWX) provide strong bullish potential trend day continuation candidates.

Here are our top four potential downtrending stock candidates:

While we don’t like to play against a clear intraday trend in the stock market, those who prefer reversal or trend-fighting strategies may look to our top downtrending intraday stock candidates:

Tyson Foods (TSN), Verisign Inc (VRSN), Costco (COST), and NextEra Energy (NEE).

As always, continue monitoring the broader equity indexes relative to their prior highs and potential for another Bull Trap.

Afraid to Trade Premium Content and Membership

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 new 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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