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Stock Prices Decline for a Second Day

Wow stock prices can decline for a second day in a row during this short-squeezed rally!

 

 

By Corey Rosenbloom

Let’s continue our market update with a plot of the key target levels and our algorithmic stock scan of the day.

Here are our new levels for the S&P 500 Index:

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Negative divergences in an over-extended rally finally caught up with price with a two-day (so far) pullback.

Here’s a screencap of a chart I shared with members in last night’s strategy report:

The chart simply highlights the three prior retracements – and current pullback – against the current strong rally.

Note negative divergences going into the pullback and the two to three day nature of the prior retracement swings.

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

With today’s bearish sell session, we’re not seeing overwhelming negative money flow.

In fact, the strongest sector of the day is the Financials (NYSEARCA:XLF) group where 60% of stocks are positive.

The weakest – perhaps surprisingly – is the defensive Utilities (NYSEARCA:XLU) group along with Technology.

All other sectors are near their 40% watermark.

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

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

HomeAway (AWAY), Autodesk (ADSK), Ralph Lauren (RL), and Facebook (FB)

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

Qualcomm (QCOM), Albermarle (ALB), FireEye (FEYE), and Royal Gold (RGLD)