Relief Rally Market Update and Big Stock Scan May 7

May 7, 2015: 1:29 PM CST

Surprisingly, the market is behaving normally at least in terms of efficient movement between – toward and away from – key daily chart levels.

We expected a bounce/rally up off the 2,065 target which began into yesterday’s close – the rally continued today.

Here’s our Extended T3 Trend Day down for reference:

Here’s a snippet from Wednesday evening’s Member Strategy Report that forecast today’s rally:

Price reversed up off the 2,065 pivot on positive momentum and internal divergences as seen above.

This makes us short-term bullish as longs as price remains above the 2,070 level and trades up toward the 2,100 pivot.

Keep in mind that we remain in a trading range between the 2,065 level and 2,115 with the midpoint being 2,095.

It’s likely that price will be pulled up toward 2,100 like a magnet and then perhaps higher to continue the trading range.

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Trend Days in the market occur when both sides of the market are doing the same thing – for different reasons.

In this reversal-up event, buyers (building off the 2,065 pivot level) added positions as short-sellers either took profits on the way up… or losses as the market traded against them (short-sellers must buy-back positions to cover losses or take profits).

The result is another one-direction sell-swing market which was our short-term expected/logical/dominant thesis last night.

Watch price into the 2,095 and 2,100 pocket target levels and focus your attention here now.

Let’s see what our Breadth Chart reveals about current market strength (or weakness):

Be sure to visit yesterday’s mid-day update where we were seeing key pockets of strength in Breadth which signaled “not so bearish” or hidden bullish money flow (unlike Tuesday’s big trend day down where Breadth was uniformly negative).

These Breadth Update charts can provide key insights into money flow and possible reversals (like today).

So far, we’re seeing across-the-board bullish money flow except for today’s weakest sector – Energy.

Materials is also weak but all other sectors are strong, signifying strong bullish money flow today.

If the pattern continues, it suggests that buyers perhaps can continue levitating the market above 2,100.

Here are four strong bullish trending stocks from our algorithmic scan today:

Norwegian Cruise Line (NCLH), Yelp, Yahoo (YHOO), and Alibaba (BABA)

Bearish downtrending candidates include the following stocks from our “weakness” scan:

Whole Foods (WFM), Priceline (PCLN), Lannett (LCI), and Kate Spade (KATE)

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Corey Rosenbloom, CMT
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1 Comment

One Response to “Relief Rally Market Update and Big Stock Scan May 7”

  1. Santner Says:

    This is confusing for me and I believe that the first rule of success in Forex trading is to avoid working when you have even little doubts, it’s necessary to do that because Forex is a 24/5 active business and we are not going to run out of opportunities, so it’s important that we take decision on merit instead of greed, but honestly speaking I don’t need to worry much as I just pay 0.2 pips spread to my broker OctaFX, it’s a big advantage so I am never in trouble of making good profits.