Oct 20 Bull Trap Failed Breakout Update and Stock Scan

Well that was fun while it lasted.

Price broke intraday to a new swing high above 2,035 but instantly gave back the gains on a Bull Trap.

Let’s update our levels for the S&P 500 Index:

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We continue to see a build-up of extended negative divergences (including volume) which makes us cautious on this rally.

Caution was correct as today initially broke higher but buyers failed to hold the new highs as a Bull Trap sprang to life, painfully trapping the bulls.

We’re focusing on the 2,025 level and now 2,035 within the context of a rising, divergent range.

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

Sector Strength today is once again mixed with the strongest sector being Utilities – a defensive name – followed by Industrials and Financials which are offensive (bullish) names.

Health Care and Staples are today’s weakest sectors which adds to the bullish case for today.

Here’s a top-level or full-perspective view of today’s S&P 500 stock performance (courtesy of FinViz.com).

Here are today’s strongest trending (intraday) names – candidates for pro-trend continuation:

Team Health (TMH), Monster Beverage (MNST), Dover (DOV), and Allegion (ALLE)

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

Taser Intl (TASR), IBM, Tesla Motors (TSLA), and Harley Davidson (HOG)

Corey Rosenbloom, CMT
Afraid to Trade.com

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