EGG Scan for June 5th

Markets trade lower at the open, but then find a way to rally the balance of the trading day, again. This is a recurring theme for the broad indexes and leadership is remains the same suspects. No rotation of note and overall still drifting higher.

Running the EGG Scans – First the daily winners…

  • UGAZ – Natural gas back on the upside and stocks (FCG) push back near the upside as well.
  • BIB – Biotech back as well breaking above the five day consolidation. Still room for the upside move if the overall market trend remains intact.
  • KIE – Insurance sector joins the other financial parts with nice bread from a reverse head and shoulders pattern.
  • MVV – Midcap was on the leader board for the first time in awhile. Drifting higher and back near the March highs.
  • SCIF – Small Cap India is back to the vertical move following the test to end last week.
  • Honorable mention, TBT – short treasury bonds. This is something of interest as we stated in our market update on Monday the bottom for yields may be established short term and trading opportunity setting up… if money is willing to rotate from bonds. $63.45 potential entry for a trade in the ETF.

Wednesday’s moves still showing trends that are tradable, but the risk of this market is alive and well. China is getting extended or overbought, semiconductors as well, oil, emerging markets and precious metals are still jumpy. Trading is an exercise is disciplined habits… use them.

Technology is still the driver on the upside, but it was a challenging day with the early move lower, but nice recovery to push higher. Taking it slowly for now and willing to be patient as we gain some clarity in direction.

EGG Model Watch List:

EGG Model: KBE 32.50 entry. Banks are in a position to break higher, if the market trend continues higher. Watch how this trades today and watch the volume when placing trades.

EGG Tracking…

  1. PJP – Pharma (breaking from consolidation, but momentum has stalled.) entry $58.75, stop $58. Another gap open with a $59 entry point and adding to the risk of the trade. Still interesting move, but needs a follow through on test of the move. $59.45 entry. still attempting to follow through on the upside.
  2. BRCM – giving the best look relative to the semiconductors leadership. $31.15 entry on Wednesday 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 on Thursday (entry $31.50) and it followed through on Friday. Stop $31.15. News pushed the stock up 12% on Monday at the open. 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 on Tuesday and follow through on Wednesday.

Current EGG: