EGG Scan for June 26th

All is well no more worries as markets bounce back. Despite the downward revisions to GDP, poor durable goods numbers and no settlement to the situation in Iraq, the markets gained on the day. In fact running the scans tonight showed a return to the previous leaders.

The first signs of some negative sentiment in the markets on Tuesday were gone today. The VIX index fell back to 11.5 and holding for now. The sentiment was not overtly buyer driven, but it was leaning in that direction again. Now we look for a follow through tomorrow and the opportunities left in the wake of the choppy moves.

Bristol Myers Squibb (BMY) showed signs of completing a bottom reversal helping the healthcare sector move higher. Perrigo (PRGO) equally made a solid move above the 200 DMA adding to the upside of the stock and the sector.

Schlumberger (SLB) jumped to a new high on the day adding to the uptrend, energy and oil services. Oil Services (IEZ) and Exploration (XOP) both had solid bounce from the short term sell off.

CBS and Gannett (GCI) both jumped higher to help the media sector show up on the leaders list.

Need to see follow through on Thursday if the upside is going to find the buyers to keep the trend alive. One day at a time is all we can do if the trend is to keep moving higher.

Running the EGG Scans – First the daily winners…

CURE (healthcare) made a solid move on the upside with a continuation following the test from last week. SVXY (short VIX) back to the upside with the shift in volatility today. PBS (Media) new comer to the list today as sector breaks from a ascending triangle. Small Caps (TNA) nice bounce off the selling on Tuesday. NUGT (gold miners) back on the positive side with bounce on Wednesday.

OIH, FCG, TAN and XOP all moved back from the selling on Tuesday. The energy sector still showing upside movement with oil, natural gas and gasoline all on the upside and helping the stocks turn in positive days as well.

EGG Model Scan Watching…

Tuesday we discussed the shift in sentiment in the outcome of the daily scans. The Volatility Index (VIX) moved higher and VXX rose 3.6% on the day. The question now is how much do we believe the upside will hold versus how much the bears like having a foot in the door. Energy (dropped 2% on the Tuesday with worries overall), Alternative Energy (equally fell more than 2% on the day), Precious Metals(metals flat and miners down 2%), Utilities (still makes sense as a defensive play), Healthcare (gave up early gains to close flat.). All are worth watching for confirmations tomorrow.

Wednesday the reversal back to positive. As we discussed above this brings uncertainty back into play at least for a day. Still tracking how this unfolds based on the previous scans we have been tracking below. I am looking for a return to where we were prior to reaction on Tuesday. Today showed some return and tomorrow will be equally important for the broad markets.

  • Monday’s leaders – DGAZ (short natural gas) UNG broke support and the selling is gaining momentum. NUGT (gold miners still pushing higher), SVXY short volatility posted nice gain on the day, RUSL (Russia) making move higher? watching to see how it unfolds. AMJ (MLPs) making move to continue the uptrend.
  • Friday’s leaders – BIB (Biotech) broke from trading range, PJP (Pharma) continuation of move higher, TAN (Solar) continuation of uptrend, IEZ (Oil Services) acceleration in uptrend and Cooper (JJC) base metals moving off lows. Healthcare sector was primary leader on Friday and showing some renewed strength in the current move.
  • Thursday’s leaders – NUGT/GDX/GDXJ – (Gold Miners) gold jumps 3.5% and the miners 16%, USLV/SIL (Silver) up 13.8%,  TBT (Short Treasury bonds) up on yields rising, EWJ (Japan) nice follow through on continuation breakout, and EPU (Peru) breakout from consolidation,
  • Wednesday’s leaders – RUSL (Russia) bounced back 7.5%, NUGT (Gold Miners) jumped 7.6%, SVXY (volatility disappears again), EDC (Emerging Markets) Nice bounce, GREK (Greece) nice bounce off test in move higher. Honorable mention XLU (Utilities) nice bounce through resistance.
  • Tuesday”s leaders – TAN (Solar), PBW (Clean Energy), SVXY (short VIX), TNA (Small Caps) and FAS (Financials). Honorable mention KRE (Regional Banks) & KRE (Banks).
  • Monday’s leaders – UPW (Utilities), XBI (biotech), IHI (Medical Devices), TAN (Solar) and DIG (Energy). IHI benefited from the acquisition in the sector. TAN is EGG today.
  • Friday’s leaders – YINN (China), ERX (Energy), TAN (Solar), SOCL (Social Media), USLV (Silver) and RUSL (Russia).
  • Thursday’s leaders – 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.

Current EGG:

Hit our exit points on TAN on Tuesday and we are now looking for the next opportunity.

Two sectors to review currently… Healthcare and Energy, both of which have continued to upside trend and continue to show resilience in the face of worry. Others worth review on today’s move is Consumer services, transportation and basic materials. We are digging into this further and may post an individual stock from one of these positive movements as the EGG position if warranted on a risk/reward basis.