March 11 Support and Market Update with New Stock Scan

Mar 11, 2015: 2:38 PM CST

Today’s session continued the selling pressure of yesterday, but the bears were less relentless.

Buyers stepped in to support the market – at least twice – into the 2,040 S&P 500 pivot.

Let’s update our key levels, highlight the divergence, and of course note trending stocks today:

Our critical support pivot (intraday) will simply be the 2,040 index level.

Look for a breakout rally (short-term) should price break firmly above the 2,047 and 2,050 levels.

It could lead to a retracement back to the 2,060 level (at least for an upside target).

We note the lengthy positive divergence and rising TICK Channel as bullish support-bounce evidence.

Otherwise, this market is bear, bear, bear or sell, sell, sell under the 2,040 pivot.

Continue Reading…

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March 10 Selloff Update and Trending Stock Scan

Mar 10, 2015: 1:50 PM CST

The selling pressure continued today on the support breakdown under 2,070’s pivot.

What resulted – logically – was a strong trend day down toward the next target just like we saw on Friday.

Let’s update our key levels, highlight the divergence, and of course note trending stocks today:

After a reasonable bounce up off the 2,065/2,070 target level, stocks fell under support (with a gap) and then now has traded all the way down toward the 2,050 target.

We’re watching our 2,050 pivot and if it fails – as seems expected here – then the “Mirror Image Foldback” pattern could easily continue, taking price all the way down to the 2,000 return target.

Continue Reading…

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Five Strong Stocks Holding Up Surprisingly Well During the Pullback

Mar 10, 2015: 9:16 AM CST

During market pullbacks, it’s often helpful to step inside the market to see which stocks are showing relative strength, or “holding their own” against the tide of selling in the broader market.

Let’s pinpoint five strong stocks going toe-to-toe with the sellers – these shall warrant our attention as buy candidates when the tide of selling stops.

Here’s a quick look at these five selected names:

While the market itself has retraced from its prior high, these stocks have either made new swing highs.

These are strong stocks and compelling candidates by themselves, but it may be helpful to put them on a watchlist for potential buy (swing trade) candidates once the market finds support and rallies to end the current sell-swing retracement.

Here’s a quick snapshot of three of these stocks along with key levels to watch: Continue Reading…

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Returning to a World Where Breadth Divergences Matter

Mar 6, 2015: 12:46 PM CST

It’s easy to get caught up in thinking “The market will go up forever!” when in reality, the rules of gravity have not been permanently amended.

What goes up must come down, and trends (even intraday ones) must eventually retrace.

Divergences are great warning signs that a mature trend may soon reverse.

Let’s revisit this lesson as we plan and trade today’s sell-off in the context of a world where divergences matter:

We’re charting the @ES Futures which could just as easily be the S&P 500 Index or the SPY ETF.

The main idea is to plot price – in this case on the intraday (30-min) frame – with something else like internals, momentum, or volume.

We’re seeing NYSE Breadth or the Number of Advancing Issues Minus the Number of Declining Issues.

Breadth is helpful for assessing internal strength – or weakness – of a price movement.

Internals (the ‘guts’ of the market) are often strongest (making new highs) at the beginning of an intraday trend and weakest – diverging – as the mature trend nears a reversal.

I color-coded the chart above to make it simple to see the trend in price overlaid with the trend in Breadth. Continue Reading…

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Apple AAPL at Key Trading Pivot Level on Dow Jones News

Mar 6, 2015: 11:45 AM CST

Is Apple (AAPL) a buy right here at a key inflection level as news broke that Apple would replace AT&T (T) in the Dow Jones Industrial Average?

Let’s take a look at this key trader level and plot the bull/bear scenarios:

Just looking at the Daily Chart, Apple (AAPL) is a potential BUY for a flag/retracement pattern into the support of the rising 20 day EMA at the $126.00 per share level.

Stops would be placed under $125.00 and $126.00 and a bearish “alternate” or breakdown price pathway (aggressive short-sell opportunity) would open under $125.00 per share to target the rising 50 day EMA and prior price high confluence near $120.00 per share.

Note the Green and Red price pathways originating from the “Decision Point” at $126.00.

I highlighted two similar retracement patterns on the Daily Chart and you can view how price behaved.

The trend continued after a clean breakout higher triggered a breakout buy signal and buyers overtook sellers. Continue Reading…

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