June 5 Stimulus Short Squeeze Breakout and Stock Scan
Sellers can’t seem to stop this freight train of a bullish market in breakout mode.
With the ECB announcement behind us, buyers took the opportunity to thrust the market into another breakout which then immediately triggered more stop-losses from the short-sellers which continued the powerful short-squeeze already in motion.
There’s not really a key index level to watch or target when a market breaks this impulsively to all-time highs:
I’ve been highlighting the sharp bullish reversals from capital injections into the market at the lows (V-Spike intraday reversals) and another one occurred this morning off the open which is the same event as described in yesterday’s update.
Buyers flooded in as logical bearish sellers flooded out after the ECB announcement with their buy-to-cover stop-loss orders which again helpful fuel the rally with a short-squeeze breakout.
We’ll still be watching the trend for any continuity or else stall/sideways action to develop in the context of a one-sided, buy (bull) dominated market.
Money is flowing consistently into all S&P 500 sectors today, yet 100% of Utility stocks are positive now:
This is the picture of bullish strength with the exception of all Utility Sector stocks remaining positive at the moment.
The other main bullish sector is Industrials, but even then sector strength is uniform across the board.
Roughly 83% of both Dow Jones and S&P 500 stocks are positive on the session.
We ONLY have bullish pro-trend continuity stocks today – stay away from the short side of this market:
Amazon (AMZN), Agilent Technologies (A), General Dynamics (GD), and Union Pacific (UNP).
A reminder – there are no downtrending short-sale candidates at the moment – don’t try to short this breakout market!
In lieu of short-sale candidates, take a moment to review prior posts in the archive regarding short-squeezes or “Popped Stops” breakout events (and how to trade them):
“Playing Popped Stops from a Failed Retracement“
“Positive Feedback Loops in Price – SPX“
Popped Stops and History Repeating (during January 2011)
Lessons from Failed Sell Signals and Popped Stops
Opportunities from Popped Stops Intraday
Quick Lesson from Intraday Creeper Trend Moves
A Lesson from Creeper Intraday Trend Moves with Divergences
July 11, 2011 “Making Sense of Current Range Behavior”
Textbook Triangle Trade Example in Crude Oil (tactics)
Higher Timeframes Lessons from the Breakout in Silver (Aug. 7, 2011)
Sep. 20, 2011 “SPX Breakout Trading Tips – Is this Really it?” (yes)
Lessons from Failed Sell Signals and Popped Stops
Opportunities from Popped Stops Intraday
Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade
Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).