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Short-Squeeze Continues on Tuesday

The buyers collectively were successful in extending the short-squeeze manipulation of the stock market higher.

 

By Corey Rosenbloom

This resulted in the logical bullish price action (via stop-losses of the bears) as the S&P 500 crested above the key 2,100 level.

Today’s session extends the short-squeezed Trend Day of yesterday.

Let’s update our levels for the S&P 500 (NYSEARCA:SPY) Index:

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In simplest terms, buyers extended the short-squeeze, boosting stock prices to new swing highs in a positive feedback loop suggested by the recent bullish breakout and close above 2,100.

And here’s a direct quote from yesterday’s public mid-day update that still applies today:

“Make no mistake – a continued breakout above 2,100 sets in motion a repeat of the 2010 and 2011 “Repeat Pathway to New Highs” and those who have adapted to this new market reality have profited – while others are helping drive the market higher with their collective losses via buy-to-cover stopped-out short-sold positions.”

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

The Sector Rotation chart (Money Flow Grid) does show a little less bullishness or participation.

Nevertheless, Energy(NYSEARCA:XLE)  is today’s strongest sector followed by most all of the Offensive names except Financials(NYSEARCA:XLF).

Staples and the Defensive Group (ex-Financials) are the weakest performing sectors today (which is bullish).

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:

Sanmina (SANM), Bitauto (BITA), Monsanto (MON), and Jabil Circuit (JBL)

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

AMAG Pharma, Adeptus Health (ADPT), Vector Group (VGR), and Altria (MO)