Feb 3 Big Reversal Update and Bullish Stock Scan

Bycjrosen

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.

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

Breadth is positive across the board except for our Defensive Sectors of Staples, Health Care, and Utilities.

This simply confirms the bullish money flow and suggests additional higher stock prices as a result.

We have potential bullish trend continuation plays in the following stocks from our scan:

BHP Billiton (BBL), Jinko Solar (JKS), Agco, and US Silica (SLCA)

Potential downtrending candidates exist in stocks showing relative weakness today:

The only stock appearing in our algorithmic downtrend formula is Stratasys (SSYS).

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Corey Rosenbloom, CMT
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