New month, but the same old worries persist. Russia still tops on the list with the diplomatic community asking for peaceful settlement and Ukraine not backing down. We will have to let that pot simmer and keep focused on the matters at hand. As we start the new week the leadership is still on the sluggish side and with new money hitting to start the month we will be cautious as this continues to unfold.
Running the EGG Scans – First the daily winners…
Friday ended on a positive note and we will start with what looks good to set up the week.
Small Caps (TNA) were back on the leader board Friday. This is still one to watch for more upside should the broad markets remain in the micro term uptrend. Looking for a close above 1177 on the Russell 2000 index.
Treasury bonds (TMF or TLT) were the leaders last week hitting a new 12 month high. The May 2013 highs are the next target. Is fear really the driver or is it money flowing into bonds as safety around the world? Upside remains in play and worth watching to see how it unfolds going forward.
Russia Short (RUSS) As we stated no big surprise on this news driven country. The stocks continued to fall more than 1.8% (RSX) and the leveraged short ETF jumps more than 5.7% on Friday. News driven and difficult to trade. No positive developments over the weekend still looking for downside.
Gold Minders (GDX) moved back on the list after selling off and establishing a low at the bottom of the trading range. The price of gold moved higher last week, but still looks flat at best. The move has sparked some renewed interest in the miners, but I would be cautious on this one. If gold remains positive this could be a trade back to the top of the range.
Other moves of interest…
PBW, clean energy ETF on the weekly chart in position to break from a three month base. XOP, exploration and production ETF broke above resistance at $78 and cleared the 50 DMA. The energy sector has been struggling, but work watching along with IEO. SOXX, semiconductors moved back near the previous highs with solid move on Friday. Look for follow through and continuation of the previous uptrend. VNM, Vietnam is still one of the leading emerging market country ETFs and worth tracking as well.
Still interesting from yesterday:
Biotech (XBI) jumped through resistance last week and followed it up on the upside. A follow through on this large cap ETF or the multicap ETF, IBB are two to watch for the follow through leadership in the healthcare sector. Flag or pennant setup on Friday with the inside day.
Financials (XLF or FAS) held the upside move with modest follow through and a flag setup on the close Friday. It is still up to the banks and brokers to lead the sector to higher ground. It will require patience going forward.
Brazil (EWZ) solid break from the trading range and move higher. The country is giving the emerging markets a lift overall. Watch for the opportunities in the specific country ETFs.
Latin America (ILF) more focus on the emerging market growth. Positive upside and break higher.
Energy MLPs (FEI) add this to the list of upside plays with plenty of potential upside.
Utilities (XLU) fell on Tuesday and regains the upside on Wednesday. Still one to watch for the short term potential on the upside. Nice follow through on Friday.
Natural Gas (UNG) back in the line up on the upside as this commodity continues to frustrate investors. We are back to the double bottom setup we discussed last week and we will watch to see if it follow through. Inside day on Friday?
Added ITB (homebuilders) last week. The disappointing news from the new home sales pulled the ETF lower, but the news was not a bad as the headlines prompted. Sector tested lower a the open and held stops off the position until we could see the outcome. Plus there was positive news on the pending home sales. I still like the fundamentals relative to the prices. Stick with the move and watch to see how this unfolds. Patience as we are still looking for 2-5% move on the trade.