September 5 Reversal Play and Market Update

Sep 5, 2014: 1:28 PM CST

The market has reversed course each day this week and today’s session is no exception.

Let’s update our rangebound S&P 500 intraday chart, highlight sector breadth, and end with our strongly trending stock scan of the day.

The S&P 500 has remained in a rather violent trading range the last few sessions as volatility has expanded (along with intraday range).

As mentioned, each session from the start of September has developed a sharp intraday reversal.  Today’s session reversed up from the 1,990 level on divergences.

Study prior divergent reversal examples from the week.

For now, we’ll note the rising trendline into the 2,004 level and will continue to play bullishly above 2,005 (to ‘fill out the range’) or else will be cautious on any sudden movement down against 2,005.

Sector Breadth, while mixed, tilts bearish:

Our strongest sectors of the day are the Defensive Group which includes Staples, Health Care, and Utilities.

Our weakest sectors are the core of the Offensive Group including Financials, Discretionary, and Materials.

Despite mixed or even slightly bearish sector performance, we can focus on bullishly trending candidates:

Wal-Mart (WMT), Microsoft (MSFT), Nike (NKE), and Xcel Energy (XEL).

Bearish trending candidates – some with potential reversals – include these stocks:

Dollar General (DG), Goodyear Tire (GT), Regeneron (REGN), and Noble Corp (NE).

Corey Rosenbloom, CMT
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