Feb 6 Reversal Market Update and Bull Bear Stock Scan

Feb 6, 2015: 1:40 PM CST

Markets are never boring!  That’s for sure.

What started as a strong, bullish session has now reversed – from negative divergences – to a Rounded Reversal.

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

On the Unemployment Report, stocks started the session trending higher on a short-squeeze but ended the rally just above the 2,070 level on a lengthy negative Market Internal Divergence.

The afternoon shatter of the 2,070 level set in motion a sell swing and reversal down to create (so far) a Rounded Reversal pattern all the way under the opening price.

The short-term level to watch is 2,060/2,055 which puts us back in the consolidation level of yesterday’s session.

Continue Reading…

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Eight Stock Stocks Gapping and Trending Higher Feb 6

Feb 6, 2015: 12:27 PM CST

Intraday traders often scan for stocks that are strong and likely to get stronger so they can trade in the direction of the trend should it continue for the remainder of the session.

Here are eight selected stocks from our algorithmic scan this morning that are showing gaps and potential continual intraday movement in the trend direction, giving us possible pullback (retracement) opportunities:

Google (GOOGL), Flir Systems (FLIR), Wells Fargo (WFC), Buffalo Wild Wings (BWLD)

M&T Bank (MTB), Linked In (LNKD), Verisign (VRSN), and Moody’s (MCO).

Some of these companies are rallying on positive trader reaction to earnings reports and others are just showing relative strength.

The financial sector (broad ETF symbol XLF) is outperforming other sectors today so it may be worth your while to spend extra time finding strong trending financial stocks to trade.

Monitor the price action relative to the rising moving averages and look to trade in the direction of the bullish price action as long as price remains above the 20 EMA (5-min) along with the 50 EMA.

Trail stops under one or both of these averages (depending on your risk tolerance). Continue Reading…

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February Market Structure and Trend Reference Charts for Gold Oil Stocks Dollar

Feb 4, 2015: 3:08 PM CST

Let’s step outside the noise and view a broader picture of the reference charts for “Color Market Structure” and Trend for the US S&P 500, US Dollar Index, along with leading commodities Gold and Crude Oil.

Structure Charts help us pinpoint the trend and help put our positions in a broader context.

We’ll start with the uptrending S&P 500:

When we discuss “Structure,” we’re detailing the trend as measured with the series of price highs and lows.

We’re encapsulating the trend with hand-drawn trendlines to connect as many swings as possible.

Also, we quantify “structure” by the length of the swings where small swings represent low volatility and stability while wide swings – which is what we’re seeing currently – represent imbalance/disequilibrium which shows up as an increase in volatility.

In that sense, we can describe trend structure as “Up, Down, or Sideways/Balanced” and also assess Volatility (stable or unstable). Continue Reading…

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Feb 4 Trending Stock Scan and Market Update

Feb 4, 2015: 2:11 PM CST

Buyers extended their dominance today, though they’re meeting resistance with divergences, suggesting their bullish swing may be ending.

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

For a broader discussion on this ongoing and important pattern, see my update post “Plotting the Current Range and Future Breakout for the S&P 500.”

Buyers held the market up at the 1,990 reversal, triggering the current bullish rally and short-squeeze.

While TICK (and momentum) Divergences forecast a likely reversal at the lows, we’re seeing these same indicators flash Negative Divergences into the 2,050 level.

This is a caution signal and puts us on guard for yet another bearish play down away from 2,050.

Otherwise, a breakout to new swing highs beyond today’s high suggests 2,060 would quickly be in play.

Continue Reading…

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Feb 3 Big Reversal Update and Bullish Stock Scan

Feb 3, 2015: 2:28 PM CST

After a lengthy positive divergence into support developed yesterday, buyers (unwilling to let the stock market fall even a tiny bit beneath 2,000) extended the gain and broke stocks higher to continue the wider consolidation pattern.

We’ll start with the ongoing intraday downtrend the S&P 500 and highlight our trending stocks:

For a broader discussion on this ongoing and important pattern, see my update post “Plotting the Current Range and Future Breakout for the S&P 500.”

Shares continued the intraday downtrend into higher time frame support as lower timeframe positive divergences developed.

We can see the bullish breakout and Stick-Save (short-squeeze) rally that developed Monday which simply extends today.

Watch the 2,050 and then 2,060 index levels going forward.

Continue Reading…

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