EGG Scan for June 13th

The sellers exerted more pressure on Thursday to shift the sentiment and volatility in the markets currently. Friday will be an important day for the markets relative to a reversal and support. A market in transition is not one you want to put money into unless the transition is already in play. At this point there is more confusion than defined direction short term. Thus, patience is the key with the EGG scans and letting the leadership develop. This is nothing more than measuring the risk of trades.

Running the EGG Scans – First the daily winners…

  • UCO (Crude Oil), SIL (Silver miners), GDXJ (junior gold miners), TAN (solar power) UGAZ (natural gas), and DBE (energy).
  • Wednesday’s Leaders – RUSL (down 4%), SOCL (down 0.7%), PALL (down 4.5%), FCG (up 1.4%), JMF (down 1.3%) I stated they gave a different look, and that look didn’t last for more than one day. FCG, natuarl gas stocks were the only follow through backed by natural gas moving up more than 4% on the day.
  • VIX moves up slightly and put VXX on our watch list. {Nice follow through on Thursday} Considering adding this to the EGG selection if breaks through key points.
  • SKF shows up in the scan as financials have a tough day. {Continued on Thursday}
  • The miners with GDX and GDXJ moving up nicely the last couple of days. {big follow through}
  • SDOW showed the negative day for the DOW. {Nice follow through as well.}
  • SIL – Silver miners have done well over the last week up 7.2% off the low. The break above $12 was attractive on Wednesday for trading opportunity with tight stop. (followed through Thursday adding 3.8%) manage the risk.
  • The Negative EGG Scan produced a couple of sectors of interest as the turn off the highs start. IYR – REITs was on it for the second day. IYT – Transportation showed up today. RWO – Global REITs added today. PCY – Emg Market Sovereign Debt ETF showed up today as well. This is showing some of the downside leaders over the last three to five trading days and is worth tracking to see if it develops into any opportunities.

Putting it all together we get some follow through rotation on emotions, speculation and data, but not enough to change the tide of the the upside yet. Thursday offered more insight on this topic, but there is still plenty of work to do. The data above is producing some nice trades with high risk, but valid opportunities.

EGG Model Watch List:

EGG Tracking…

  1. BRCM – giving the best look relative to the semiconductors leadership. $31.15 entry last week was optimal looking back. Thus, a test of that level and hold, or a move through $31.50 on volume would be of interest for a EGG trade on individual stock level. Got the early move last Thursday (entry $31.50) and it followed through on Friday. News pushed the stock up 12% last week. Sold half at $35 and $34 stop on the balance. See how this plays out… the news wasn’t that earth shattering and willing to take my gift of gains. Nice bounce back towards the highs the balance of the week. Raise stop to $37 on balance of shares. Topping and volume falling back to normal tighter stops and watching.

Current EGG:

KBE 32.50 entry. Banks made the break higher and the market trend continues higher. The follow through move helps the upside in the broad indexes and we continue to look for the upside in financials as it attempts to take on a leadership role near term. Stop is $33.05. (watch to take 1/2 the trade off at $33.25 on Wednesday and hit stop on the balance on Thursday.) Played out well, but the top reversal wasn’t clean. If the upside returns to the major indexes this will likely surface again as an opportunity.

NO EGG Position Currently.