EGG Scan for May 29th

Wednesday showed some signs of fatigue, but fight it off and close slightly lower on the day. The buyers are still engaged and the leadership still not showing up with consistency, but enough to keep the dream alive. The thirty-year treasury bond was one of the top performing sectors for the trading day, and puts a new twist of the market outlook. US Equities, Global Equities, Bonds and Dollar are showing positive signs the last week. Commodities are lagging and showing weakness, Global Bonds are flat and Real Estate is trading sideways. Some rotation back to growth, but is it sustainable? The questions are still mounting on worry side, and answers on the buy-side are fewer and more speculative in nature. Bottom line remain patient and manage your risk. Sounds like a broken record, but it is a necessary process in managing money.

Running the EGG Scans – First the daily winners…

  • TMF – Treasury bonds lead the day? Worthy of note!
  • UGAZ – Natural Gas returns and breaks through short term resistance on the upside again.
  • IYT – Transportation post another solid gain as sector goes vertical? Again not what you normally see as leader.
  • FXI – China back in the picture on the upside as opportunity.
  • DUST – Short gold miners adds 5% to the 11% gain the last two days.

EGG Model Watch List:

EGG setup going¬†forward…

  1. SOXL РSemiconductors. (SOXX, SMH)  entry $90.20. stop $87.80. This gapped above the entry point on Tuesday. Still looking for test or reasonable entry point.
  2. PJP – Pharma (breaking from consolidation and gaining momentum.) 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.
  3. 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.

Current EGG:

QLD is still in play for those who took the trade. Played out well in the end despite the shaky start. Recommended selling at on Tuesday (sold at $106). The attempted move higher on Wednesday failed to hold and tested lower. The stop is $105.40 and need to manage into the open today. Focus on the simple not what you think may happen looking forward. Protect the gain for now. I added 1 share to the table to track the trade out for those who entered the position, adjust your stop and manage the position out.