Up Up and Away for Home Depot HD Breakout

Aug 19, 2014: 10:30 AM CST

On better than expected earnings, retail stock Home Depot (HD) gapped higher, breaking to all-time highs through a ceiling of resistance.

Let’s take a look at the breakout and note how far Home Depot has traveled in a short amount of time.

Here’s the Daily Chart with the Breakout:

Shares actually broke free of a resistance level – a Symmetrical Triangle Price Pattern – above $82.00 per share and continued the bullish impulse into the $84.00 level.

Today’s pre-market earnings boosted shares above the breakout into a trending impulse well above the $84.00 prior high level.

Let’s pull the perspective back to get a sense of what’s happened previously chart the strength of the current trend: Continue Reading…

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August 18 Breadth and Stock Scan Market Update

Aug 18, 2014: 1:32 PM CST

Our mid-day update takes place on yet another bullish trend day higher as price breaks through resistance toward the prior highs, as I’ve been highlighting recently.

For our S&P 500 update, see this morning’s post “On and Up to New Highs for the S&P 500” along with the recent “Breakout from a Repeat Pattern” post.

In sum, the market is doing exactly what it should be doing in order to complete a “Repeat Pattern.”

To further put the odds in the Bullish Camp, let’s take a look at today’s strong Sector Breadth Chart:

Unlike Friday’s chart, we see strong Sector Bullishness across the board – underscored by the dismal performance of Utilities today (only 1 of 27 S&P 500 Utility stocks are positive right now).

Our other relative strength laggard is Energy while all other sectors – Bullish along with the defensive Staples – enjoy strong sector performance.

If you’re looking to play trend continuation trades, focus on the following names which could trend higher into the close: Continue Reading…

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Intraday Divergence and Reversal Planning for Crude Oil

Aug 18, 2014: 12:55 PM CST

Crude Oil may be forming an intraday reversal pattern – with divergences – off an important short-term support level.

Even if you don’t trade Crude Oil, let’s study the Color Structure chart and learn a lesson on intraday trends, divergences, and reversals.

We see a Color Structure chart on the 5-min (very short-term) intraday scale with brief but persistent intraday trends.

Momentum (3/10 Oscillator) Divergences formed at the reversal points for the short-term price trends.

Now, we’re planning a potential reversal play (aggressive opportunity) up off the $93.40 @CL futures level (look for a comparable level in the USO or related ETFs) given the positive momentum divergences and recent “trendy” behavior.

Also note the breakthroughs of narrow (yet parallel) price trendlines to set the stage for a reversal (trendline breaks can be entry/exit signals). Continue Reading…

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NASDAQ Breaks to New Highs on Relative Strength

Aug 18, 2014: 10:57 AM CST

If you’re an S&P 500 or Dow Jones only trader, you may be missing the fact that the NASDAQ broke out to new highs this morning and the Russell 2000 index is close on its heels to its own fresh new breakout (while the S&P 500 and Dow lag behind).

Let’s chart the breakout and then compare a “Relative Strength” chart to highlight what’s going on behind the scenes.

I just posted about the S&P 500 this morning so be sure to view the background beyond the NASDAQ from this morning’s post.

The NASDAQ gapped and trended higher (trend day so far) above the resistance cluster into 4,490.

At this moment, short-sellers are losing money and are rushing to buy-back to cover losses (which – perversely – helps propel the index even higher as more short-sellers are forced to buy-back to cover losses).

New breakout-buy signals are triggering for bulls as well, resulting in a potential “feedback loop” of upside price action.

As long as price remains above this pivot point, buyers are firmly in control of the market. Continue Reading…

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On and Up Toward New Highs for SP500

Aug 18, 2014: 10:34 AM CST

Today’s bullish short-squeeze and continuation breakout activity confirms the bullish upward pathway that may continue to lead – once again – to new highs for the S&P 500.

Let’s update our pattern, view the pathway, and study what opportunities exist for us.

First, take a look at my two prior updates on this topic (before today’s confirmation):

Planning a Breakout (from a Repeat Pattern) in the S&P 500

S&P 500 “Breaks on Through to the Other Side

Decision Point for the Dow Jones

Today’s session further places the odds on the bullish side as price moves up above resistance and – likely (though not guaranteed) – toward the prior high into 1,990 (or even 2,000).

Quite simply, this is a “Repeat Pattern” as I’ve been highlighting to members and even on the open blog. Continue Reading…

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